Vulcan Value Partners, an investment management firm, published its “Large Cap, Small Cap, Focus Composite, Focus Plus Composite, and All Cap Composite” second quarter 2021 investor letter – a copy of which can be downloaded here. Vulcan’s Large Cap Composite Fund delivered a 12.4% net return for the second quarter of 2021, 9.9% for the Small Cap, 14.8% for the Focus Composite Fund, 13.9% return was delivered by the Focus Plus Composite Fund, and 13.6% was gained by the All Cap Composite Fund for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
In the Q2 2021 investor letter of Vulcan Value Partners, the fund mentioned Medpace Holdings, Inc. (NASDAQ: MEDP), and discussed its stance on the firm. Medpace Holdings, Inc. is a Cincinnati, Ohio-based contract research organization, that currently has a $6.45 billion market capitalization. MEDP delivered a 29.42% return since the beginning of the year, extending its 12-month returns to 47.64%. The stock closed at $180.15 per share on August 05, 2021.
Here is what Vulcan Value Partners has to say about Medpace Holdings, Inc. in its Q2 2021 investor letter:
“We purchased three new positions and exited three positions during the quarter (including Medpace). Medpace Holdings Inc. is a top ten global clinical contract research organization (CRO) providing outsourced drug development services. Medpace provides a full-service model attractive to small- and mid-sized biotechnology firms who lack the infrastructure needed to navigate the development process. This customer base is typically less price sensitive and relies on Medpace to perform end-to-end contract services for drug development.”
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Based on our calculations, Medpace Holdings, Inc. (NASDAQ: MEDP) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. MEDP was in 21 hedge fund portfolios at the end of the first quarter of 2021, compared to 25 funds in the fourth quarter of 2020. Medpace Holdings, Inc. (NASDAQ: MEDP) delivered a 9.91% 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.
