Here’s Why Wasatch Global Investors Sold its Planet Fitness Inc. (PLNT) Position

Wasatch Global Investors, an investment management firm, published its “Wasatch Core Growth Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 5.59% was recorded by the fund for the Q1 of 2021, trailing the benchmark, Russell 2000 Index, that increased 12.70% and the Russell 2000 Growth Index that rose 4.88% for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Wasatch Global Investors, in its Q1 2021 investor letter, mentioned Planet Fitness, Inc. (NYSE: PLNT), and shared their insights on the company. Planet Fitness, Inc. is a Hampton, New Hampshire-based fitness company that currently has a $6.6 billion market capitalization. Since the beginning of the year, PLNT delivered a -0.63% return, while its 12-month gains are up by 32.77%. As of May 07, 2021, the stock closed at $77.14 per share.

Here is what Wasatch Global Investors has to say about Planet Fitness, Inc. in its Q1 2021 investor letter:

“At the other end of the spectrum, we completely sold our position in Planet Fitness, Inc. (PLNT) even though some speculators would consider the stock to be a reopening play. The company owns and operates a chain of fitness clubs. The stock spiked on optimism that people will return to pre-pandemic levels of exercise at group facilities. But recent earnings for Planet Fitness didn’t impress us, and we decided the stock was too expensive based on our projection for the company’s growth rate.”

Our calculations show that Planet Fitness, Inc. (NYSE: PLNT) 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, Planet Fitness, Inc. was in 47 hedge fund portfolios compared to 45 funds in the third quarter. PLNT delivered a -2.01% 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.