Qualivian Investment Partners, an investment management firm, published its second-quarter 2021 investor letter – a copy of which can be downloaded here. From inception (December 14, 2017) to the end of Q2 2021, the fund has returned 102.8% and 98.5% on a gross and net basis respectively, outperforming the S&P 500 Total Return index by 30.4% and 26.1%, respectively. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Qualivian Investment Partners, the fund mentioned Intuit Inc. (NASDAQ: INTU) and discussed its stance on the firm. Intuit Inc. is a Mountain View, California-based software company with a $154.9 billion market capitalization. INTU delivered a 49.37% return since the beginning of the year, while its 12-month returns are up by 80.12%. The stock closed at $567.38 per share on September 10, 2021.
Here is what Qualivian Investment Partners has to say about Intuit Inc. in its Q2 2021 investor letter:
“The Thesis in a Nutshell
Intuit is an attractive combination of:
• attractive economics,
• a wide moat, especially via the development of a connected ecosystem/digital platform that locks stakeholders in, and
• strong growth in core markets supplemented by geographic global expansion, as well as,
• a shareholder-oriented management team.It is a quality compounder. At the right price it is a clear buy.
What Intuit Does
Intuit dominates the small and medium business (SMB) accounting software category as well as the doit-yourself (DIY) tax preparation software market. Intuit has three key businesses:
• Software for financial and business management (QuickBooks) as well as integrated payroll solutions, merchant payment processing solutions, and financing for small businesses in the US and key global markets;
• Do‑it‑yourself and assisted income tax preparation software products (TurboTax) and services sold in the US and Canada; and
• FinTech Apps (Mint and now Credit Karma) that provide users the ability to integrate and monitor their financial lives in one platform, while allowing them to shop for financial service products (credit cards, mortgages, auto loans, and insurance products)…” (Click here to see the full text)
Based on our calculations, Intuit Inc. (NASDAQ: INTU) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. INTU was in 66 hedge fund portfolios at the end of the first half of 2021, compared to 68 funds in the previous quarter. Intuit Inc. (NASDAQ: INTU) delivered a 20.17% 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.
