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Alphabet Inc. (GOOG), A Top Performer in Alger Spectra’s Q1 2021 Portfolio

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Jose Karlo Mari Tottoc
·4 min read
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Alger, an investment management firm, published its “Alger Spectra Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. During the first quarter of 2021, the largest portfolio sector weightings were Information Technology and Consumer Discretionary. Class A shares of the Alger Spectra Fund underperformed the Russell 3000 Growth Index during the first quarter of 2021. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Alger Spectra Fund, in their Q1 2021 investor letter, mentioned Alphabet Inc. (NASDAQ: GOOG) and shared their insights on the company. Alphabet Inc. is a Mountain View, California-based holding company that currently has a $1.5 trillion market capitalization. Since the beginning of the year, GOOG delivered a 29.39% return, extending its 12-month gains to 97.74%. As of April 16, 2021, the stock closed at $2,297.76 per share.

Here is what Alger Spectra Fund has to say about Alphabet Inc. in their Q1 2021 investor letter:

"Alphabet Inc. was among the top contributors to performance during the quarter. Alphabet is a leading search provider and as such a beneficiary in the share shift of advertising dollars from traditional mediums like television, radio and newspapers to digital platforms. The company is a leader in implementing artificial intelligence and in developing autonomous vehicles. It also provides cloud computing services and it owns the highly trafficked YouTube property. Alphabet issued a strong quarterly report highlighted by acceleration that exceeded prior strong growth trends in both revenue and profitability. Results of the company's search service and YouTube strongly exceeded expectations. The strength of search results, driven by e-commerce-related demand and YouTube results, were propelled by returning brand advertisement in a sequentially improving economy. The revenues acceleration was seen in cloud services as well as because of continuing corporate spending on digitization. Earnings exhibited strong operating leverage as costs were down year over year due to slowing headcount growth, as well as diminished travel and office space costs. While regulatory scrutiny remains an overhang, the intensity of investor concern has moderated recently as the late 2020 U.S. Department of Justice anti-trust case against the company had a narrow scope, primarily alleging that the company has improperly established agreements with various phone manufacturers, including Apple, to ensure that Google is the default search engine across devices. Investors have interpreted the lawsuit as potentially less damaging to Alphabet than other broader more threating possibilities."

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Our calculations show that Alphabet Inc. (NASDAQ: GOOG) ranks 6th in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Alphabet Inc. was in 157 hedge fund portfolios, compared to 150 funds in the third quarter. GOOG delivered a 4.96% 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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Disclosure: None. This article is originally published at Insider Monkey.