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EHang Holdings Ltd (EH) Performed Poorly, A Top Detractor in Alger’s Q1 2021 Results

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Jose Karlo Mari Tottoc
·3 min read
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Alger, an investment management firm, published its “Alger Mid Cap Focus Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. During the quarter, the largest portfolio sector weightings for the fund were Consumer Discretionary and Information Technology. The fund’s largest sector overweight was Consumer Discretionary. Class Z shares of the Alger Mid Cap Focus Fund outperformed the Russell Midcap 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 Mid Cap Focus Fund, in their Q1 2021 investor letter, mentioned EHang Holdings Limited (NASDAQ: EH) and shared their insights on the company. EHang Holdings Limited is a Huangpu, Shanghai, China-based autonomous aerial vehicle technology platform company that currently has a $1.5 billion market capitalization. Since the beginning of the year, EH delivered a 32.21% return, extending its 12-month gains to 124.70%. As of April 16, 2021, the stock closed at $27.91 per share.

Here is what Alger Mid Cap Focus Fund has to say about EHang Holdings Limited in their Q1 2021 investor letter:

"EHang Holdings Ltd. was among the top detractors from performance. EHang operates an autonomous aerial vehicle (AAV) technology platform in China. It designs, develops, manufactures, sells and operates AAVs, as well as their supporting systems and infrastructure, for a range of industries and applications, including passenger transportation, logistics, smart city management and aerial media solutions. EHang is an opportunity to invest in the state-driven objective of China involving commercializing passenger-grade drone travel and EHang is by far the only AAV operator expected to receive a commercialization permit this year. Domestic rollouts of services starting in 2021 could potentially be a major inflection point in AAV adoption curve. Recently a short report came out attacking the integrity of EHang's business practices and the stock has tumbled. Since then, EHang has provided evidence as part of rebutting the claims and an upcoming earnings call could potentially clear the remaining concerns."

Copyright: bugphai / 123RF Stock Photo

Our calculations show that EHang Holdings Limited (NASDAQ: EH) 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, EHang Holdings Limited was in 2 hedge fund portfolios. EH delivered a -30.23% 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.