Greenhaven Road Capital, an investment management firm, published its second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly return of approximately 6% net of fees was recorded by the fund for the second quarter of 2021, bringing YTD returns to approximately 21%. You can view the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Greenhaven Road Capital, the fund mentioned PAR Technology Corporation (NYSE: PAR), and discussed its stance on the firm. PAR Technology Corporation is a New Hartford, New York-based systems and service solutions provider, that currently has a $1.6 billion market capitalization. PAR delivered a -0.05% return since the beginning of the year, while its 12-month returns are up by 104.03%. The stock closed at $62.76 per share on July 29, 2021.
Here is what Greenhaven Road Capital has to say about PAR Technology Corporation in its Q2 2021 investor letter:
“PAR Technology (PAR) – During the quarter, I had the opportunity to spend more time in person with PAR CEO Savneet Singh. For me, he hits all the right notes on building a team and making long-term investments to build out product offerings. If I am near a computer while he is speaking, I find myself wanting to purchase additional shares. Ultimately, talking a good game is a lot easier than actually realizing the vision. The company still has to prove that they can increase the pace of installs, get traction on their payments business, and integrate their acquisitions. PAR will have to divest the legacy defense business and change their accounting practices to stop capitalizing software development. It is by no means time to take a bow, but Savneet has driven the company towards sufficient scale, made three acquisitions, and attracted talent. I think the PAR team has positioned the company well for the next decade of enterprise restaurant software.”
Based on our calculations, PAR Technology Corporation (NYSE: PAR) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. PAR was in 16 hedge fund portfolios at the end of the first quarter of 2021, compared to 19 funds in the fourth quarter of 2020. PAR Technology Corporation (NYSE: PAR) delivered a -23.59% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually 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 is originally published at Insider Monkey.