Third Point Management, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. A portfolio return of +12.5% was delivered by the flagship Offshore Fund, bringing year-to-date returns to +29.5%. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Third Point Management, in its Q3 2021 investor letter, mentioned SentinelOne, Inc. (NYSE: S) and discussed its stance on the firm. SentinelOne, Inc. is a California, United States-based cybersecurity company with a $17.7 billion market capitalization. SentinelOne delivered a 94.22% return since the beginning of the year and it closed at $66.97 per share on November 01, 2021.
Here is what Third Point Management has to say about SentinelOne, Inc. in its Q3 2021 investor letter:
“Our top winners on a percentage basis in Q3 were our two largest positions; (which includes) SentinelOne, up 26%, as public market investors rewarded both companies’ disruptive business models and high-growth trajectories. We expect SentinelOne to grow rapidly and continue to gain market share over the next decade as flexible work patterns, cloud adoption, and IoT create more security vulnerabilities. This market is still dominated by legacy vendors whose solutions pale when compared to SentinelOne’s autonomous, machine-learning based security, which is taking share and helping the company grow annual recurring revenue by more than 100% yearover-year.”
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Based on our calculations, SentinelOne, Inc. (NYSE: S) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. SentinelOne was in 67 hedge fund portfolios at the end of the first half of 2021. SentinelOne, Inc. (NYSE: S) delivered a 28.86% 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.
