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MicroStrategy Inc. (MSTR), Among Alger Mid Cap’s Top Contributors for Q1 2021

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Jose Karlo Mari Tottoc
·4 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 MicroStrategy Incorporated (NASDAQ: MSTR) and shared their insights on the company. MicroStrategy Incorporated is a Virginia, United States-based business intelligence company that currently has a $6.7 billion market capitalization. Since the beginning of the year, MSTR delivered a 78.51% return, extending its 12-month gains to 448.19%. As of April 16, 2021, the stock closed at $693.62 per share.

Here is what Alger Mid Cap Focus Fund has to say about MicroStrategy Incorporated in their Q1 2021 investor letter:

"MicroStrategy Incorporated was among the top contributors to performance. MicroStrategy is a global leader in enterprise analytics software and services. MicroStrategy's core software platform provides customers with visualization and reporting capabilities, mobility features and custom applications to help with complex business questions. Today, MicroStrategy has over 4,000 customers worldwide. In August 2020, MicroStrategy decided to make bitcoin its preferred reserve currency. To date, MicroStrategy has purchased over 90,000 bitcoins at an aggregate purchase price of $2.17 bi11 ion and an average price of over $23,985 per bitcoin. Going forward, MicroStrategy plans to use excess cash generated by its core business to purchase additional bitcoin.

Shares of MicroStrategy outperformed in the first quarter due to the appreciation of the company's bitcoin asset, as the price of bitcoin relative to the U.S. dollar rose materially in the quarter. This bitcoin appreciation was driven by concerns about U.S. dollar inflation as well as other public companies deciding to acquire bitcoin to diversify reserve assets. MicroStrategy is establishing itself as a thought leader in the bitcoin space, and the company hosted an event at its February user conference to help other organizations understand the benefits of bitcoin as a reserve asset. MicroStrategy's core software business is also benefitting from its status as a leader in the bitcoin space, with the increased public attention aiding MicroStrategy's recruitment and marketing efforts as the software business continues to transition to a cloud-based subscription model."

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Our calculations show that MicroStrategy Incorporated (NASDAQ: MSTR) 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, MicroStrategy Incorporated was in 15 hedge fund portfolios, compared to 20 funds in the third quarter. MSTR delivered a 19.99% 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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