Alger, an investment management firm, published its ‘Alger Small Cap Focus Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. In the letter, the fund highlighted their largest portfolio sector weightings, which is in the Health Care and Information Technology sector, and their comments on notable companies. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Alger Small Cap Focus Fund, in their Q4 2020 investor letter, mentioned Stamps.com Inc. (NASDAQ: STMP) and emphasized their views on the company. Stamps.com Inc. is a California-based online mailing and shipping service provider that currently has a $3.49 billion market capitalization. Since the beginning of the year, STMP delivered a -3.04% return, but its 12-month gains are still up by 65.56%. As of March 12, 2021, the stock closed at $190.23 per share.
Here is what Alger Small Cap Focus Fund has to say about Stamps.com Inc. in their Q4 2020 investor letter:
“Stamp.com Inc. provides internet-based mailing and shipping solutions to individuals, small businesses, e-commerce shippers, enterprises and high-volume shippers. Through its portfolio of branded solutions and more than 500 unique integrations with marketplaces, shopping carts, e-commerce tools and shipping software platforms. Stamps.com software allows its nearly one million members to print mailing and shipping labels for multiple carriers around the world. Stamps.com has a unique and defensible competitive position in the market as one of only a few U.S. Postal Service-approved third-party PC-based postage vendors, and we believe the company is well-positioned to benefit from the secular shift toward e-commerce, which has been accelerated by Covid-19.
Although Stamps.com’s stock price climbed 135% in 2020, its shares underperformed after the company released its earnings report for the third quarter in early November. Specifically, the company’s guidance included a significant slowdown in fourth quarter estimated revenue growth. More broadly, investors are also concerned about the company facing difficult year-over-year comparison in 2021. More recently, e-commerce and shipping data points have largely remained strong through the holiday period, which let to a modest recovery in the company’s share price heading into yearend.”
Our calculations show that Stamps.com Inc. (NASDAQ: STMP) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Stamps.com Inc. was in 38 hedge fund portfolios, compared to 31 funds in the third quarter. STMP delivered a -3.25% return in the past 3 months.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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