Alger Small Cap: “BigCommerce (BIGC) is Well-Positioned for Continued Market Share Gains”

Jose Karlo Mari Tottoc
·4 min read

Alger, an investment management firm, published its “Alger Small Cap Focus Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. During the quarter, the largest portfolio sector weightings were Health Care and Information Technology. The largest sector overweight was Health Care. Class A shares of the Alger Small Cap Focus Fund underperformed the Russell 2000 Growth Index during the first quarter of 2021. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Alger Small Cap Focus Fund, in their Q1 2021 investor letter, mentioned BigCommerce Holdings, Inc. (NASDAQ: BIGC) and shared their insights on the company. BigCommerce Holdings, Inc. is a Austin, Texas-based SaaS e-commerce platform that currently has a $4.3 billion market capitalization. Since the beginning of the year, BIGC delivered a -8.85% return, while its 3-month gains are also down by -6.25%. As of April 16, 2021, the stock closed at $59.79 per share.

Here is what Alger Small Cap Focus Fund has to say about BigCommerce Holdings, Inc. in their Q1 2021 investor letter:

"BigCommerce Holdings, Inc. was among the top detractors from performance. BigCommerce operates a software-as-a-service platform, providing various services for launching and scaling e-commerce operations, including store design, catalog management, web hosting, checkout, order management and reporting As of December 31, 2020, it served approximately 60,000 online stores across industries in approximately 155 countries. The stock underperformed during the first quarter after the company provided guidance that was below the peer group average for growth for 2021, which indicated possible market share loss. The company monetizes its services with software subscriptions, which represent 67% of its sales, and by processing digital payments as the majority of partner and services revenues, which represents 33% of sales. BigCommerce recognizes its revenues from digital payments on a net basis, which understates the payment revenue contribution and margin compared to its peer group which recognizes revenues on gross basis.

BigCommerce has transformed over the last decade into a flexible digital commerce platform powering the next wave of online shopping for mid-market and enterprise customers. BigCommerce is differentiated among modern cloud platforms because its open SaaS architecture uniquely positions the firm for the more complex needs of mid- market and enterprise merchants. This is a big opportunity. and we believe BigCommerce is well-positioned for continued market share gains."

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Our calculations show that BigCommerce Holdings, Inc. (NASDAQ: BIGC) 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, BigCommerce Holdings, Inc. was in 26 hedge fund portfolios, compared to 18 funds in the third quarter. BIGC delivered a 3.07% return in the past month.

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.