Oakmark Funds, an investment management firm, published its “Oakmark International Fund” second quarter 2021 investor letter – a copy of which can be seen here. A return of 4.29% was reported by the fund in the Q2 of 2021, compared to its benchmark, the MSCI World ex U.S. Index, which returned 5.7% 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 Oakmark Funds, the fund mentioned Grupo Televisa, S.A.B. (NYSE: TV), and discussed its stance on the firm. Grupo Televisa, S.A.B. is a Mexico City, Mexico-based mass media company with a $7.09 billion market capitalization. TV delivered a 53.52% return since the beginning of the year, extending its 12-month returns to 95.52%. The stock closed at $12.50 per share on August 26, 2021.
Here is what Oakmark Funds has to say about Grupo Televisa, S.A.B. in its Q2 2021 investor letter:
“Grupo Televisa, a media company headquartered in Mexico and the world’s largest producer of Spanish-language content, was a top contributor for the second quarter. Grupo Televisa’s share price jumped when the company revealed that it would merge its content and media assets with Univision. In a call with shareholders, CEO of Televisa, Alfonso de Angoitia, and CEO of Univision, Wade Davis, provided details on the $4.8 billion agreement, which combines these leading media businesses in the two largest Spanish-speaking markets in the world. Overall, we think the deal makes strategic sense as streaming is the future in television, and the new company will very likely become the dominant Spanish-language streaming service. There will also be synergies from combining the two businesses, which should improve profitability versus when they were stand-alone businesses. In addition, over the long term, we believe consolidation in the media sector will continue, providing an opportunity for the new entity to partner with a larger company. Aside from the strategic merits, we believe Televisa received an attractive valuation for its content business as the $4.8B value was higher than our internal estimates. We commend management for this transaction.”
Photo by Jonas Leupe on Unsplash
Based on our calculations, Grupo Televisa, S.A.B. (NYSE: TV) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. TV was in 17 hedge fund portfolios at the end of the first half of 2021, compared to 15 funds in the previous quarter. Grupo Televisa, S.A.B. (NYSE: TV) delivered a -2.47% 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.
