Wasatch Global Investors, an investment management firm, published its “Wasatch Small Cap Growth Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A return of 6.32% was recorded by the fund’s investor class for the Q2 of 2021, outperforming the benchmarks, Russell 2000 Growth Index, that increased 3.92%, and the Russell 2000 Index that rose to 4.29% for the same period. 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 Wasatch Global Investors, the fund mentioned ZipRecruiter, Inc. (NYSE: ZIP) and discussed its stance on the firm. ZipRecruiter, Inc. is a Santa Monica, California-based employment marketplace with a $3.1 billion market capitalization. ZIP delivered a 5.58% return for the past month, and it closed at $27.04 per share on September 20, 2021.
Here is what Wasatch Global Investors has to say about ZipRecruiter, Inc. in its Q2 2021 investor letter:
“We’re excited about several new portfolio holdings in the Fund. For example, during the second quarter, we purchased ZipRecruiter, Inc. (ZIP). We believe ZipRecruiter is an extremely wellmanaged company that provides a full range of employment services—most of which are enabled by technology. The company offers recruiting, hiring, job boards, posting, web application, candidate screening, applicant tracking and job alerts. The process of employing workers historically has been very time-consuming, inefficient and fraught with mistakes. Therefore, tech-enabled employment services are clearly going to be in high demand going forward. But traditional employment methods still dominate the process of attracting workers and finding jobs. That will change. So there’s enormous headroom for growth. In the employment space, we think ZipRecruiter is one of the two best-positioned U.S. companies. And beyond domestic borders, the international potential is even larger.”
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Based on our calculations, ZipRecruiter, Inc. (NYSE: ZIP) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. ZIP was in 5 hedge fund portfolios at the end of the first half of 2021. ZipRecruiter, Inc. (NYSE: ZIP) delivered a 17.98% 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.
