Oakmark Funds, an investment management firm, published its “Oakmark International Fund” third quarter 2021 investor letter – a copy of which can be seen here. A return of 42.0% was reported by the fund for the fiscal year ended September 30, 2021, outperforming the MSCI World ex U.S. Index, which was 26.5% over the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Oakmark Fund, in its Q3 2021 investor letter, mentioned Trip.com Group Limited (NASDAQ: TCOM) and discussed its stance on the firm. Trip.com Group Limited is a Shanghai, China-based travel agency company with a $19.2 billion market capitalization. TCOM delivered a -10.44% return since the beginning of the year, while its 12-month returns are down by -17.39%. The stock closed at $30.21 per share on November 7, 2021.
Here is what Oakmark Fund has to say about Trip.com Group Limited in its Q3 2021 investor letter:
“Trip.com Group ADR (China), the largest online travel agency in China, and Reckitt Benckiser Group (U.K.), a large global consumer products company, were both previous holdings in the Fund. With significant declines in share price, the stocks again offered the necessary potential upside to be selected for our portfolio.”
Photo by sabina fratila on Unsplash
Based on our calculations, Trip.com Group Limited (NASDAQ: TCOM) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. TCOM was in 41 hedge fund portfolios at the end of the first half of 2021, compared to 35 funds in the previous quarter. Trip.com Group Limited (NASDAQ: TCOM) delivered a 21.57% 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.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, billionaire John Paulson is loading up on the miners, so we are checking out stock pitches like this mining stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.
Disclosure: None. This article is originally published at Insider Monkey.
