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Here’s Why Bernzott Capital Exited its SPS Commerce (SPSC) Position

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·3 min read
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Bernzott Capital Advisors, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A net return of 10.27% was recorded by the fund for the Q1 of 2021, below the Russell 2000 Value and Russell 2500 Value Index that delivered a 21.17% and 16.83% returns respectively for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Bernzott Capital Advisors, in their Q1 2021 investor letter, mentioned SPS Commerce, Inc. (NASDAQ: SPSC), and shared their insights on the company. SPS Commerce, Inc. is a Minneapolis, Minnesota-based software company that currently has a $3.5 billion market capitalization. Since the beginning of the year, SPSC delivered a -10.13% return, extending its 12-month gains to 63.49%. As of May 05, 2021, the stock closed at $97.59 per share.

Here is what Bernzott Capital Advisors has to say about SPS Commerce, Inc. in their Q1 2021 investor letter:

"SPS Commerce (SPSC): The company is a well-run, software-as-a-service supplier of supply chain management solutions to retailers. Despite selling to an end market suffering disruption and fast changing business dynamics, the resilience of SPS Commerce's business is indicative of its compelling solution. The stock appreciated significantly during 2020, in part due to multiple expansion. The stock reached our estimate of fair value during the first quarter, and we exited the position with a significant gain, as the stock more than doubled."

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Oleksiy Mark/Shutterstock.com

Our calculations show that SPS Commerce, Inc. (NASDAQ: SPSC) 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, SPS Commerce, Inc. was in 14 hedge fund portfolios. SPSC delivered a -8.54% 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.