Wasatch Global Investors, an investment management firm, has released its Q2 2021 “Wasatch Ultra Growth Fund” letter to investors – a copy of which can be downloaded here. A quarterly return of 6.02% was recorded by the fund’s investor class for the second quarter of 2021, beating its benchmark, the Russell 2000 Growth Index, which posted a gain of 3.92% for the year. same period. You can check out the top 5 holdings of the fund to get an idea of their top bets for 2021.
In Wasatch Global Investors’ Q2 2021 letter to investors, the fund mentioned Intra-Cellular Therapies, Inc. (NASDAQ: ITCI) and discussed its position on the company. Intra-Cellular Therapies, Inc. is a United States-based biopharmaceutical company with a market capitalization of $ 2.9 billion. ITCI has returned 15.36% year-to-date, while its 12-month returns are up 29.13%. The stock closed at $ 35.30 per share on September 20, 2021.
Here’s what Wasatch Global Investors has to say about Intra-Cellular Therapies, Inc. in its Q2 2021 letter to investors:
“Intra-Cellular Therapies, Inc. (ITCI), a developer of therapies for central nervous system disorders, has also been a major contributor. Intra-Cellular shares rose in May after the company announced that the United States Food and Drug Administration (FDA) agreed to review its requests for additional new drugs for CAPLYTA® (lumateperone), a investigational agent for the treatment of bipolar depression. Previously approved for the treatment of schizophrenia in adults, the attractiveness of CAPLYTA for the treatment of bipolar depression is greatly enhanced in our opinion by its favorable safety and tolerability profile. Growing optimism about Intra-Cellular’s other pipeline programs also appeared to boost the company’s stock price during the quarter. “
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Based on our calculations, Intra-Cellular Therapies, Inc. (NASDAQ: ITCI) was unable to secure a spot on our list of the 30 most popular stocks among hedge funds. ITCI was in 23 hedge fund portfolios at the end of the first half of 2021, compared to 15 funds in the previous quarter. Intra-Cellular Therapies, Inc. (NASDAQ: ITCI) has generated a return of -17.56% in the past 3 months.
The reputation of hedge funds as savvy investors has been tarnished over the past decade, as their hedged returns could not keep up with the unhedged returns of stock indices. Our research has shown that small cap hedge fund stock selection managed to beat the market by double digits every year between 1999 and 2016, but the margin for outperformance has shrunk in recent years. Nonetheless, we were still able to identify in advance a select group of hedge funds that have outperformed S&P 500 ETFs by 115 percentage points since March 2017 (see details here). We were also able to identify in advance a select group of hedge funds that underperformed the market by 10 percentage points per year between 2006 and 2017. Interestingly, the margin of underperformance of these stocks has increased in recent years. Investors who are long in the market and short on these stocks would have reported more than 27% per year 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 originally appeared on Insider Monkey.