Bernzott Capital Advisors, an investment management firm, published its “US Small Cap Value Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. The portfolio fell -3.0% (gross) and -3.1% (net) during 3Q, in line with the Russell 2000 Value’s decline of -3.0%, and somewhat more than the Russell 2500 Value’s drop of -2.1%. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Bernzott Capital Advisors, in its Q3 2021 investor letter, mentioned Quotient Technology Inc. (NASDAQ: QUOT) and discussed its stance on the firm. Quotient Technology Inc. is a Mountain View, California-based coupon company with a $663.4 million market capitalization. QUOT delivered a -25.21% return since the beginning of the year, while its 12-month returns are down by -1.05%. The stock closed at $7.05 per share on November 9, 2010.
Here is what Bernzott Capital Advisors has to say about Quotient Technology Inc. in its Q3 2021 investor letter:
“Quotient Technology (QUOT): Despite being telegraphed in the prior quarter, margin weakness weighed on the stock’s performance despite profit achieving the low end of guidance. Mix shift has driven margins lower. Management has called for 2Q to be the low point, as consumer packaged goods companies increase promotional activity prompted, in part, by inflation and the need to retain pricesensitive consumers. The company’s new self-service platform for enhanced ease of use and performance measurement should also bolster promotional activity in coming periods. The company’s digital promotions continue to take share from free standing inserts.”
Photo by Danial Igdery on Unsplash
Based on our calculations, Quotient Technology Inc. (NASDAQ: QUOT) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. QUOT was in 24 hedge fund portfolios at the end of the first half of 2021, compared to 25 funds in the previous quarter. Quotient Technology Inc. (NASDAQ: QUOT) delivered a -10.76% 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.