SRK Capital, an investment management firm, published its second quarter 2021 investor letter – a copy of which can be downloaded here. A return of +59.17% was delivered by the fund for the second half of 2021, outperforming the S&P 500 and the Russell 2000 Index that gained +15.25% and 17.53%, respectively 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 SRK Capital, the fund mentioned Nocopi Technologies, Inc. (NYSE: NNUP), and discussed its stance on the firm. Nocopi Technologies, Inc. is a West Conshohocken, Pennsylvania-based document security products developer, that currently has an $13.9 million market capitalization. NNUP delivered a 43.10% return since the beginning of the year, extending its 12-month returns to 15.34%. The stock closed at $0.2130 per share on August 10, 2021.
Here is what SRK Capital has to say about Nocopi Technologies, Inc. in its Q2 2021 investor letter:
“It seems my recommendation for the company to repurchase shares has fallen on deaf ears and now the share price has rallied by more than 30%. Q1 results showed a promising improvement in licenses, royalties, and fees, which tend to lead product sales higher as product at the end market is bought and needs restocking. Looking forward I expect Nocopi to continue its growth as it has the past several years. The main question persists, will they commit to returning capital to shareholders.”
Based on our calculations, Nocopi Technologies, Inc. (NYSE: NNUP) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. Nocopi Technologies, Inc. (NYSE: NNUP) delivered a 23.88% 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.
