Wasatch Global Investors, an investment management firm, published its “Wasatch Ultra Growth Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly return of 6.02% was recorded by the fund’s investor class for the Q2 of 2021, beating its benchmark, the Russell 2000 Growth Index, which had a 3.92% gain for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Wasatch Global Investors, the fund mentioned Intra-Cellular Therapies, Inc. (NASDAQ: ITCI) and discussed its stance on the firm. Intra-Cellular Therapies, Inc. is a United States-based biopharmaceutical company with a $2.9 billion market capitalization. ITCI delivered a 15.36% return since the beginning of the year, while its 12-month returns are up by 29.13%. The stock closed at $35.30 per share on September 20, 2021.
Here is what Wasatch Global Investors has to say about Intra-Cellular Therapies, Inc. in its Q2 2021 investor letter:
“Intra-Cellular Therapies, Inc. (ITCI), a developer of therapeutics for disorders of the central nervous system, was also a top contributor. Shares of
Intra-Cellular moved higher in May after the company announced that the U.S. Food and Drug Administration (FDA) had accepted for review its supplemental New Drug Applications for CAPLYTA® (lumateperone), an investigational agent for the treatment of bipolar depression. Previously approved for the treatment of schizophrenia in adults, CAPLYTA’s appeal for treating bipolar depression is significantly enhanced in our view by its favorable safety and tolerability profile. Growing optimism about Intra-Cellular’s other pipeline programs also appeared to boost the company’s stock price during the quarter.”
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Based on our calculations, Intra-Cellular Therapies, Inc. (NASDAQ: ITCI) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. ITCI was in 23 hedge fund portfolios at the end of the first half of 2021, compared to 15 funds in the previous quarter. Intra-Cellular Therapies, Inc. (NASDAQ: ITCI) delivered a -17.56% 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.
