Miller Value Partners, an investment management firm, published its “Miller Income Strategy” third quarter 2021 investor letter – a copy of which can be seen here. A quarterly return of -2.8% has been recorded by the fund for the third quarter of 2021, versus the 0.9% return of the ICE BofA US High Yield Index for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Miller Value Partners, in its Q3 2021 investor letter, mentioned The Chemours Company (NYSE: CC) and discussed its stance on the firm. The Chemours Company is a Wilmington, Delaware-based chemicals company with a $4.8 billion market capitalization. CC delivered a 19.08% return since the beginning of the year, while its 12-month returns are up by 30.56%. The stock closed at $29.52 per share on November 4, 2021.
Here is what Miller Value Partners has to say about The Chemours Company in its Q3 2021 investor letter:
“The Chemours Co (CC) dropped 15.9% over the period. The company reported Q2 revenue of $1.7Bn, topping consensus of $1.54Bn and rising +51% Y/Y driven by +46% volume growth while price and foreign exchange (FX) added +6%. EBITDA of $366M beat by 11% on increased volumes while FCF of $189M (+278% Y/Y) drove $13M of stock buybacks and $20M of debt paydown. Management expects FY21 EBITDA and earnings per share (EPS) to come in at the high-end of prior guidance, or $1.25Bn and $3.56, respectively with FCF exceeding $450M. Additionally, Chemours announced a settlement with the State of Delaware regarding all chemical cleanup and environmental remediation for the state.”
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Based on our calculations, The Chemours Company (NYSE: CC) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. CC was in 24 hedge fund portfolios at the end of the first half of 2021, compared to 27 funds in the previous quarter. The Chemours Company (NYSE: CC) delivered a -12.27% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
