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ClearBridge Investments, an investment management firm, published its “Aggressive Growth Strategy” first quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Aggressive Growth Strategy outperformed its Russell 3000 Growth Index benchmark in the first quarter. On an absolute basis, the Strategy generated gains across seven of the eight sectors in which it was invested (out of 11 sectors total). You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Seagate Technology Holdings plc (NASDAQ: STX), and shared their insights on the company. Seagate Technology Holdings plc is a Cupertino, California-based storage company that currently has a $19.4 billion market capitalization. Since the beginning of the year, STX delivered a 37.77% return, extending its 12-month gains to 79.84%. As of June 22, 2021, the stock closed at $84.50 per share.
Here is what ClearBridge Investments has to say about Seagate Technology Holdings plc in its Q1 2021 investor letter:
"Our high active share approach made the most difference in IT, where the portfolio’s holdings gained 4.5% compared to a loss for the benchmark. Results were led by our more cyclical positions in digital storage provider Seagate Technology."
Our calculations show that Seagate Technology Holdings plc (NASDAQ: STX) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Seagate Technology Holdings plc was in 27 hedge fund portfolios, compared to 30 funds in the fourth quarter of 2020. STX delivered a 20.08% 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.
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Disclosure: None. This article is originally published at Insider Monkey.