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Alger Weatherbie: “Core Lab (CLB) is Positioned to Benefit From the Lifting of Restrictions”

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Alger, an investment management firm, published its “Alger Weatherbie Specialized Growth Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. During the third quarter, the largest portfolio sector weightings were Information Technology and Health Care. The largest sector overweight was Financials. The portfolio had no exposure to the Communication Services, Consumer Staples, or Utilities sectors. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Alger, in its Q3 2021 investor letter, mentioned Core Laboratories N.V. (NYSE: CLB) and discussed its stance on the firm. Core Laboratories N.V. is an Amsterdam, Netherlands-based petroleum industry company with a $1.3 billion market capitalization. CLB delivered a 6.49% return since the beginning of the year, while its 12-month returns are up by 87.33%. The stock closed at $28.23 per share on October 22, 2021.

Here is what Alger has to say about Core Laboratories N.V. in its Q3 2021 investor letter:

"Core Laboratories Nevro Corp. were among the top detractors from performance. Core Laboratories is a unique oil services company that provides reservoir description and production enhancement services and products to the oil and gas industry. These services and products enable Core Laboratories’ clients to improve well performance and increase resource recovery from producing fields. During the quarter, many oil service stocks were weak due, in part, to the potential for reduced demand because of the lingering pandemic. Core Laboratories has not been immune to this pressure with many industry projects experiencing temporary delays as a result of country- or region-specific COVID-19 related restrictions. We believe the company is positioned to potentially benefit from the eventual lifting of restrictions and work resumes on amore consistent basis."

construction, drill, drilling, energy, equipment, exploration, fuel, gas, gasoline, holland, industrial, industry, maintenance, ocean, offshore, oil, petroleum, plant, platform, port, power, production, pump, refinery, rig, rotterdam, sea, sky, steel, technology, tower, well
construction, drill, drilling, energy, equipment, exploration, fuel, gas, gasoline, holland, industrial, industry, maintenance, ocean, offshore, oil, petroleum, plant, platform, port, power, production, pump, refinery, rig, rotterdam, sea, sky, steel, technology, tower, well

Copyright: 1971yes / 123RF Stock Photo

Based on our calculations, Core Laboratories N.V. (NYSE: CLB) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. CLB was in 16 hedge fund portfolios at the end of the first half of 2021, compared to 17 funds in the previous quarter. Core Laboratories N.V. (NYSE: CLB) delivered a -17.17% 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.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.

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