Evermore Global Advisors, an investment management firm, published its “Evermore Global Value Fund” second-quarter 2021 investor letter – a copy of which can be downloaded here. Institutional Class shares of the Evermore Global Value Fund (“EVGIX” or the “Fund”) were down 0.14% for the quarter ended June 30, 2021. The Fund ended the quarter with $264.8 million in net assets and 37 issuer positions. As of quarter-end, 68.4% of the Fund’s net assets were in micro-and small-capitalization (up to $2 billion) companies; 11.7% were in mid-capitalization (between $2 billion and $10 billion) companies, and 16.6% were in large-capitalization (> $10 billion) companies 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 Evermore Global Advisors, the fund mentioned Mudrick Capital Acquisition Corporation II (NASDAQ: MUDS) and discussed its stance on the firm. Mudrick Capital Acquisition Corporation II is a United States-based special purpose acquisition company with a $392.3 million market capitalization. MUDS delivered a 0.81% return in the past month, and it closed at $9.92 per share on September 24, 2021.
Here is what Evermore Global Advisors has to say about Mudrick Capital Acquisition Corporation II in its Q2 2021 investor letter:
“Mudrick Capital Acquisition Corp II (MUDS US) is a special purpose acquisition company (“SPAC”). In April, the company announced a plan to merge with The Topps Company, a maker of trading cards and confectionary products. We initiated a position in MUDS soon after the merger was announced.”
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Based on our calculations, Mudrick Capital Acquisition Corporation II (NASDAQ: MUDS) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. MUDS was in 1 hedge fund portfolio at the end of the first half of 2021, compared to 8 funds in the previous quarter. Mudrick Capital Acquisition Corporation II (NASDAQ: MUDS) delivered a -15.99% 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.