To Cut the Story ‘Short’: Roubaix Capital Suffered For Shorting Diebold Nixdorf (DBD)

Roubaix Capital LLC, an investment management firm, published its ‘Roubaix Fund Composite’ fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A net return of 26.63% was recorded by the fund for the Q4 of 2020, outperforming its HFRI Equity Hedge benchmark that delivered a 14.50% return but below its Russell 2000 index that had a 31.37% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Roubaix Capital, in their Q4 2020 Investor Letter, said that Diebold Nixdorf, Incorporated (NYSE: DBD) was the top detractor for their short portfolio in the fourth quarter of 2020. Diebold Nixdorf, Incorporated is a global financial and retail technology company that currently has a $1 billion market cap. For the past 3 months, DBD delivered a decent 51.29% return and settled at $13.45 per share at the closing of February 12th.

Here is what Roubaix Capital has to say about Diebold Nixdorf, Incorporated in their Q4 2020 investor letter:

“The largest detractor in the short portfolio during the fourth quarter was Diebold Nixdorf (DBD). The company’s primary business is selling automated teller machines to banks. We view the cash ecosystem as a structural share loser and several companies in this ecosystem are on our short focus list. While electronic payments continue to consistently take share, and while there was some concern about using paper money during the health crisis, DBD was able to post reasonable results. The stock has carried a low valuation as many stocks do when they have secular pressure. This low valuation allowed the stock to rally alongside the market in Q4 and we exited on our risk discipline. We will continue to monitor this stock and others in this ecosystem for opportunities to re-short when the risk-reward is more favorable.”

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Last December, we published an article telling that Diebold Nixdorf, Incorporated (NYSE: DBD) was in 15 hedge fund portfolios. Its all time high statistics is 21. DBD delivered a 48.45% return in the past 12 months.

Our calculations show that Diebold Nixdorf, Incorporated (NYSE: DBD) does not belong in our list of the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 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. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.