Smead Capital Management, an investment management firm, published its “Smead Value Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. For the third quarter, the Smead Value Fund (SMVLX) gained 0.44% versus a gain of 0.58% for the S&P 500 Index and a loss of 0.78% for the Russell 1000 Value Index. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Smead Capital Management, in its Q3 2021 investor letter, mentioned The Macerich Company (NYSE: MAC) and discussed its stance on the firm. The Macerich Company is a Santa Monica, California-based real estate investment trust company with a $4.5 billion market capitalization. MAC delivered a 101.12% return since the beginning of the year, while its 12-month returns are up by 137.65%. The stock closed at $21.46 per share on November 9, 2010.
Here is what Smead Capital Management has to say about The Macerich Company in its Q3 2021 investor letter:
“Our poor performers for the quarter were quite eclectic. Macerich (MAC) dropped 7.55% for the quarter and most of that loss was on September 30, 2021… Ironically, some of our best nine-month performers were Q3 losers. Macerich (MAC) gained 61.81% through the end of the quarter and took third place.”
Photo by Breno Assis on Unsplash
Based on our calculations, The Macerich Company (NYSE: MAC) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. MAC was in 10 hedge fund portfolios at the end of the first half of 2021, compared to 19 funds in the previous quarter. The Macerich Company (NYSE: MAC) delivered a 26.24% 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.
