Is Mettler-Toledo (MTD) a worthy equity investment?
ClearBridge Investments, an investment management firm, has published its letter to investors “Mid Cap Growth Strategy” for the second quarter of 2021 – a copy of which can be found downloaded here. While the ClearBridge Mid Cap growth strategy lagged the benchmark in the second quarter, it delivered absolute performance (+ 14.9%) and relative success (+445 basis points vs. benchmark) since the start of the year. You can check out the top 5 holdings of the fund to get an idea of their top bets for 2021.
In ClearBridge Investments’ Q2 2021 letter to investors, the fund mentioned Mettler-Toledo International Inc. (NYSE: MTD) and discussed his position on the company. Mettler-Toledo International Inc. is a Columbus, Ohio-based analytical laboratory instrument manufacturing company with a market capitalization of $ 32.1 billion. MTD has achieved a 21.69% year-to-date return, while its 12-month returns are up 42.84%. The stock closed at $ 1,408.44 per share on September 29, 2021.
Here’s what ClearBridge Investments has to say about Mettler-Toledo International Inc. in its Q2 2021 letter to investors:
“The Strategy also received strong contributions from several companies in the healthcare sector. Mettler-Toledo also supports biopharmaceutical research as well as industrial and catering companies as a manufacturer of balances and analytical instruments. The release of a new product line, which can calculate weights at speeds significantly above industry standards with a smaller footprint than previous models, has allowed the company to maintain its positive momentum. “
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Based on our calculations, Mettler-Toledo International Inc. (NYSE: MTD) was unable to secure a spot in our list of 30 most popular stocks among hedge funds. MTD was in 35 hedge fund portfolios at the end of the first half of 2021, compared to 27 funds in the previous quarter. Mettler-Toledo International Inc. (NYSE: MTD) has generated a return of 0.42% 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 was originally published on Monkey initiate.