Miller Value Partners, an investment management firm, published its “Miller Opportunity Equity” third quarter 2021 investor letter – a copy of which can be seen here. A quarterly net decline of 14.2% has been recorded by the fund for the third quarter of 2021, compared to the S&P 500 that rose 0.6% in the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Miller Value Partners, in its Q3 2021 investor letter, mentioned WW International, Inc. (NASDAQ: WW) and discussed its stance on the firm. WW International, Inc. is a New York, New York-based wellness company with a $1.3 billion market capitalization. WW delivered a -25.90% return since the beginning of the year, while its 12-month returns are down by -22.24%. The stock closed at $18.08 per share on November 4, 2021.
Here is what Miller Value Partners has to say about WW International, Inc. in its Q3 2021 investor letter:
“WW International Inc. (WW) fell 48.75% during the quarter. The company reported 2Q results with revenues of $311M below consensus of $337M, with adjusted operating income of $65M below expectations of $82M. The miss came from the fact the company expected there to be a rebound in demand for weight loss as the economy started to open up but it turned out people were more focused on being social. The company guided for 2021 revenue of $1.3B near consensus of $1.28B with GAAP EPS (generally accepted accounting principles earnings per share) of $1.10-1.25 ($1.63-$1.78 excluding impact of early extinguishment of debt) versus consensus of $2.05. The company ended the quarter with the announcement that Mindy Grossman would be stepping down as President and CEO after the first quarter of 2022. The company is the process of searching for her replacement.”
Photo by Anna Pelzer on Unsplash
Based on our calculations, WW International, Inc. (NASDAQ: WW) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. WW was in 27 hedge fund portfolios at the end of the first half of 2021, compared to 28 funds in the previous quarter. WW International, Inc. (NASDAQ: WW) delivered a -42.25% 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.
