Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, published its “Longleaf Partners Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. Longleaf Partners Fund fell 5.70% in the third quarter, while the S&P 500 Index returned 0.58%. The Fund remains ahead of the index year-to-date (YTD), up 16.38% vs. the S&P’s 15.92%. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Longleaf Partners Fund, in its Q3 2021 investor letter, mentioned IAC/InterActiveCorp (NASDAQ: IAC) and discussed its stance on the firm. IAC/InterActiveCorp is a New York, New York-based media company with a $12.2 billion market capitalization. IAC delivered an 8.44% return since the beginning of the year, while its 12-month returns are up by 51.97%. The stock closed at $136.61 per share on November 12, 2021.
Here is what Longleaf Partners Fund has to say about IAC/InterActiveCorp in its Q3 2021 investor letter:
“Our other addition in the quarter is media and internet holding company IAC. We have followed IAC for years with growing admiration for the capital allocation abilities of the Joey Levin and Barry Diller team. After the spinoffs of Vimeo and Match over the last year plus, we find that the remaining assets of Angi, Dotdash, Care.com, Turo, MGM and other smaller investments are a compelling mix of high quality, understandable and underpriced businesses. We are still building our position and look forward to talking about this one more in the future. We trimmed some Comcast in the quarter as its price approached value and we found these two new holdings to be more attractive qualitatively and quantitatively. Our on-deck list grew with companies in branded industrials, technology, health care, distribution and consumer products.”
Photo by Austin Distel on Unsplash
Based on our calculations, IAC/InterActiveCorp (NASDAQ: IAC) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. IAC was in 50 hedge fund portfolios at the end of the first half of 2021, compared to 63 funds in the previous quarter. IAC/InterActiveCorp (NASDAQ: IAC) delivered an 8.48% 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.
