Alger, an investment management firm, published its “Alger Small Cap Focus Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. During the third quarter, the largest portfolio sector weightings were Health Care and Information Technology. The largest sector overweight was Health Care. The portfolio had no exposure to the Financials, Materials, Real Estate, 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 Repligen Corporation (NASDAQ: RGEN) and discussed its stance on the firm. Repligen Corporation is a Waltham, Massachusetts-based bioprocessing-focused life sciences company with a $15.1 billion market capitalization. RGEN delivered a 43.48% return since the beginning of the year, while its 12-month returns are up by 56.00%. The stock closed at $274.95 per share on October 22, 2021.
Here is what Alger has to say about Repligen Corporation in its Q3 2021 investor letter:
“Repligen Corporation was among the top contributors to performance. Repligen is aleading provider of advanced bioprocessing technologies and solutions used in manufacturing biologic drugs. Repligen’s main product areas are in filtration, which involves removing cellular metabolic waste during fermentation; chromatography, which purifies the final biologic drugs; growth factor products, which are used during manufacturing; and process analytics, which is used to analyze the purity of drug substances. The performance of Repligen shares benefited from the company announcing in July that it generated strong second quarter results. Repligen posted impressive organic growth resulting from strong demand for its core products and COVID-19 vaccine manufacturing. In addition, Repligen closed the acquisition of Polymem SA in July to significantly expand its filtration manufacturing capacity and add new technologies. The company also announced the acquisition of Avitidei, which could strengthen its protein and growth factor business.”
Based on our calculations, Repligen Corporation (NASDAQ: RGEN) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. RGEN was in 35 hedge fund portfolios at the end of the first half of 2021, compared to 38 funds in the previous quarter. Repligen Corporation (NASDAQ: RGEN) delivered a 30.98% 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.