RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) returned 13.1% for the second quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 8.5%, the Russell 1000 Growth Total Return Index (“RLG”) returned 11.9%, while the Russell 1000 Value Total Return Index returned 5.2%. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
In the Q2 2021 investor letter of RiverPark Funds, the fund mentioned Exact Sciences Corporation (NASDAQ: EXAS), and discussed its stance on the firm. Exact Sciences Corporation is a Madison, Wisconsin-based molecular diagnostics company, that currently has a $17.5 billion market capitalization. EXAS delivered a -23.01% return since the beginning of the year, while its 12-month returns are up by 20.07%. The stock closed at $102.00 per share on August 06, 2021.
Here is what RiverPark Funds has to say about Exact Sciences Corporation in its Q2 2021 investor letter:
“Despite reporting better-than-expected first quarter revenue and EBITDA, EXAS shares were a top detractor on concerns about increasing competition, as Guardant Health presented positive data for a competing colorectal cancer (CRC) blood test. Positively for EXAS, the recommended age for CRC screening was expanded to include the 45-to-49-age population, adding roughly 20 million potential patients.
In the last year, Exact has pivoted from its single cancer screening tests (Cologuard for colon cancer and Oncotype for breast cancer) to multi-cancer screening through its Thrive acquisition, and to minimal residual disease and recurrence monitoring through its recently announced Ashion and Tardis acquisitions. Through this pivot, Exact has tripled its market opportunity from $20 billion to $60 billion.”
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Based on our calculations, Exact Sciences Corporation (NASDAQ: EXAS) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. EXAS was in 41 hedge fund portfolios at the end of the first quarter of 2021, compared to 40 funds in the fourth quarter of 2020. Exact Sciences Corporation (NASDAQ: EXAS) delivered a 3.20% 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.
