Tidefall Capital Management recently released its Q1 2020 Investor Letter, a copy of which you can download here. The Fund posted a return of 6.88% for the quarter, outperforming its benchmark, the S&P which returned -20.94% in the same quarter. You should check out Tidefall Capital Management’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.
In the said letter, Tidefall Capital Management highlighted a few stocks and Royal Caribbean Cruises Ltd (NYSE:RCL) is one of them. Royal Caribbean Cruises is an American global cruise holding company based in Florida. Year-to-date, Royal Caribbean Cruises Ltd (NYSE:RCL) stock lost 52.5% and on June 15th it had a closing price of $60.83. Here is what Tidefall Capital Management said:
“Part of our positive return was due to our purchase of put options on Royal Carribean stock as a form of portfolio insurance. These options gave us the right to sell the stock at $40 in June; at the time the stock was $65. Given the lethality of Covid-19 and the heightened risk to the older customer base of cruise passengers, the put options priced at $2.74 appeared to offer a case of ‘heads I lose a little, tails I win a lot.’ (The most we could have lost was 2% of the fund). Government support seemed unlikely since all major cruise operators are incorporated abroad to avoid paying US corporate income taxes. Fortunately, in one week Royal Carribean stock declined by more than half to $30 and the options increased in value to $15.30, more than five times our cost.”
In Q1 2020, the number of bullish hedge fund positions on Royal Caribbean Cruises Ltd (NYSE:RCL) stock decreased by about 42% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with RCL’s downside potential. Our calculations showed that Royal Caribbean Cruises Ltd (NYSE:RCL) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 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. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:
Disclosure: None. This article is originally published at Insider Monkey.
