DEVON Equity Management, an investment management firm, published its “Global Opportunities Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A portfolio return of 14.1% was recorded by the fund for the second half of 2021, while its benchmark by comparison returned 12.3% for the same period. 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 DEVON Equity Management, the fund mentioned Pacific Biosciences of California, Inc. (NASDAQ: PACB), and discussed its stance on the firm. Pacific Biosciences of California, Inc. is a Menlo Park, California-based biotechnology company, that currently has a $6.05 billion market capitalization. PACB delivered a 17.27% return since the beginning of the year, impressively extending its 12-month returns to 676.02%. The stock closed at $30.21 per share on August 03, 2021.
Here is what DEVON Equity Management has to say about Pacific Biosciences of California, Inc. in its Q2 2021 investor letter:
“As a final word on Sequencing – we established a position in Pacific Biosciences (PACB US) during the quarter. Pac Bio are the leader in Long Read Sequencing (Illumina are dominant in Short Read). The Long Read market is far less developed than short read, but our continued research into the genomic sequencing field increased our confidence in the commercial viability for Long Read Sequencing in the coming years. We will discuss the investment case for Pac Bio in more detail in a future letter.”
Photo by National Cancer Institute on Unsplash
Based on our calculations, Pacific Biosciences of California, Inc. (NASDAQ: PACB) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. PACB was in 24 hedge fund portfolios at the end of the first quarter of 2021, compared to 23 funds in the fourth quarter of 2020. Pacific Biosciences of California, Inc. (NASDAQ: PACB) delivered a 22.29% 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.
