Alger, an investment management firm, published its “Alger Weatherbie Specialized Growth Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. During the third quarter, the largest portfolio sector weightings were Information Technology and Health Care. The largest sector overweight was Financials. The portfolio had no exposure to the Communication Services, Consumer Staples, or Utilities sectors. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Alger, in its Q3 2021 investor letter, mentioned Globant S.A. (NYSE: GLOB) and discussed its stance on the firm. Globant S.A. is a Buenos Aires, Argentina-based software development company with a $12.6 billion market capitalization. GLOB delivered a 40.19% return since the beginning of the year, while its 12-month returns are up by 63.10%. The stock closed at $305.07 per share on October 22, 2021.
Here is what Alger has to say about Globant S.A. in its Q3 2021 investor letter:
“Globant SA were among the top contributors to performance. Globant provides software engineering for complex, high-value projects involving emerging technologies. We believe Globant offers investors an attractive risk/reward profile based on the company’s potential for strong organic revenue growth over the long term. This stems from its pure play exposure to key secular trends involving social media, mobile internet, analytics and cloud computing as companies across the global economy embrace digital transformation. We believe this is resulting in an expanding addressable market for Globant’s services. Globant has indeed experienced remarkable growth — it took 16 years for the company to reach 10,000 employees and just two years to reach its recent milestone of 20,000 employees. The company’s emphasis on culture is an important element of ensuring it is able to attract and retain a large number of talented employees to serve the significant growth in demand for its services. For the second quarter, Globant reported results that exceeded expectations for sales and profit, raised expectations for the full year significantly and provided bullish commentary for growth in 2022.”
Photo by Danial Igdery on Unsplash
Based on our calculations, Globant S.A. (NYSE: GLOB) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. GLOB was in 23 hedge fund portfolios at the end of the first half of 2021, compared to 17 funds in the previous quarter. Globant S.A. (NYSE: GLOB) delivered a 29.66% 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.
