Third Point Management, an investment management firm, published its second quarter 2021 investor letter – a copy of which can be downloaded here. A portfolio return of +3.7% was recorded by Third Point’s Offshore Fund, bringing returns for the first half of 2021 to +15.2%. You can view the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Third Point Management, the fund mentioned SentinelOne, Inc. (NYSE: S), and discussed its stance on the firm. SentinelOne, Inc. is a California-based cybersecurity company, that currently has a $13.4 billion market capitalization. SentinelOne delivered a 6.70% return for the past month, and it closed at $52.50 per share on August 05, 2021.
Here is what Third Point Management has to say about SentinelOne, Inc. in its Q2 2021 investor letter:
“Our largest winner in Q2 was SentinelOne, which completed its initial public offering on June 30th. Today, it has a market cap of roughly ~$14 billion, over 4x its last private round valuation in November 2020. We first invested in SentinelOne in 2015, leading its Series B round at a post-money valuation of $98 million, and Robert Schwartz joined the board. After participating at each subsequent round, as well as in the IPO and after-market, we now own
over 10% of the company and Rob remains a board member. SentinelOne’s next generation, AI-powered autonomous security product for the endpoint market continues to take share from legacy incumbents such as Symantec and McAfee. Its technology compares favorably to its most relevant next-gen endpoint protection competitor, Crowdstrike, in an environment where cybersecurity has become an essential enterprise need, highlighted by frequent, well-publicized attacks.”
Photo by Danial Igdery on Unsplash
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, Inc. (NYSE: S) delivered a 6.43% return in the past month.
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.
