Wasatch Global Investors, an investment management firm, published its “Wasatch Micro Cap Value Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 14.74% was recorded by the fund’s investor class for the Q1 of 2021, trailing the benchmark, Russell Microcap® Index, which leapt 23.89% for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Wasatch Micro Cap Value Fund, in its Q1 2021 investor letter, mentioned Skyline Champion Corporation (NYSE: SKY), and shared their insights on the company. Skyline Champion Corporation is a Michigan, United States-based manufactured home company that currently has a $2.5 billion market capitalization. Since the beginning of the year, SKY delivered a 43.67% return, extending its 12-month gains to 107.90%. As of May 07, 2021, the stock closed at $44.69 per share.
Here is what Wasatch Micro Cap Value Fund has to say about Skyline Champion Corporation in its Q1 2021 investor letter:
“Skyline Champion Corp. (SKY) was another strong contributor. The company designs, manufactures and sells affordable homes and modular buildings. Skyline, which has a healthy balance sheet, focuses on the multi-family, hospitality, senior and workforce-housing segments in the United States and Canada. After an initial shock due to the coronavirus pandemic, the housing market has been remarkably strong—supported by very low interest rates and financial aid from the government.
We believe Skyline will continue to benefit from the housing shortage, the need for affordable homes and the migration out of densely populated cities and into more rural areas. This migration has been accelerated by ramifications of the pandemic. Regarding Skyline’s financial condition, margins have been high and the company has been able to raise home prices when costs for inputs like lumber and copper have increased. Part of the reason Skyline has been able to raise home prices is that the prices start from a relatively low base. And although we continue to like the company, we trimmed our position as the stock rose.”
Our calculations show that Skyline Champion Corporation (NYSE: SKY) 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, Skyline Champion Corporation was in 23 hedge fund portfolios. SKY delivered a 4.54% 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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