Alger’s Short Exposure to Seagate (STX) Detracted From Their Q4 2020 Performance

Alger, an investment management firm, published its ‘Alger Spectra Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. In the letter, the fund highlighted their largest portfolio sector weightings, which is in Information Technology and Consumer Discretionary sector, with their comments on notable companies. The Communication Services sector together with the Industrial sector is where they achieved the largest chunk of their returns. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Alger Spectra Fund, in their Q4 2020 investor letter, mentioned Seagate Technology plc (NASDAQ: STX) and emphasized their views on the company. Seagate Technology plc is a California-based storage company that currently has a $17.46 billion market capitalization. Since the beginning of the year, STX delivered a 21.32% return, extending its 12-month gains to 67.02%. As of March 15, 2021, the stock closed at $75.41 per share.

Here is what Alger Spectra Fund has to say about Seagate Technology plc in their Q4 2020 investor letter:

“Short exposure to Seagate Technology also detracted from performance. Seagate designs and manufactures data storage products and solutions, including hard disk drives, solid state hybrid drives, solid state drives and storage subsystems. We have been short the shares because the company’s hard drive business faces longer term secular challenges as hard disk drives are increasingly being replaced by solid state flash drives. Gaming consoles now use flash drives almost exclusively and more than 80% of notebook personal computers also use the technology. The economy’s cyclical pickup off the pandemic low, however, resulted in an uptick in hard disk drive demand in the retail, corporate desktop and video surveillance markets, which supported the performance of Seagate shares. As the price of Seagate shares increased, the short exposure detracted from the portfolio’s performance.”

Alger’s Short Exposure to Seagate (STX) Detracted From Their Q4 2020 Performance

Hard Disk, Hard Drive, Permanent Storage

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Our calculations show that Seagate Technology plc (NASDAQ: STX) 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, Seagate Technology plc was in 30 hedge fund portfolios, compared to 23 funds in the third quarter. STX delivered a 14.29% 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.