Alger Weatherbie Specialized Growth Fund: “Chegg (CHGG) Earnings Were Strong”

Alger, an investment management firm, published its ‘Alger Weatherbie Specialized Growth Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. In the letter, the fund highlighted their largest portfolio sector weightings, which is in Information Technology and Health Care sector, with their comments on notable companies. The Financials sector together with the Health Care sector is where they achieved the largest chunk of their returns. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Alger Weatherbie Specialized Growth Fund, in their Q4 2020 investor letter, mentioned Chegg, Inc. (NYSE: CHGG) and emphasized their views on the company. Chegg, Inc. is a California-based education technology company that currently has a $12.9 billion market capitalization. Since the beginning of the year, CHGG delivered a 1.44% return, impressively extending its 12-month gains to 190.89%. As of March 15, 2021, the stock closed at $91.63 per share.

Here is what Alger Weatherbie Specialized Growth Fund has to say about Chegg, Inc. in their Q4 2020 investor letter:

“Chegg provides online textbook rentals and other internet-delivered services, such as homework help, tutoring and assistance with obtaining scholarships and finding internships. The company has been acquiring customers at low cost, in part because it is a leader in providing supplementary educational services to college students. Its CheggServices offering helps students master subjects, get better grades, graduate and pursue careers. After reporting very strong results for the third quarter and year to date, Chegg saw an initial pullback in its stock price followed by continued strong performance. The initial pullback was due in part to the macro announcement of efficacious Covid-19 vaccines and a drop in equity prices of companies that had benefited from the remote work/learning environment. However, Chegg earnings were strong, boosted by international subscriptions and improved user authentication features.”


Our calculations show that Chegg, Inc. (NYSE: CHGG) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Chegg, Inc. was in 33 hedge fund portfolios, compared to 42 funds in the third quarter. CHGG delivered a 9.79% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.