Ariel Investment, a minority-owned investment company that focuses in small and mid-capitalized US based stocks, published its third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A positive return of 4.56% was recorded by the fund for the 3rd Quarter of 2020, ahead of its Russell 2500 Value benchmark that returned 3.54%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
Ariel Investments in their Q3 2020 Investor Letter said that they were able to distinguish a value in FLIR Systems, Inc. (NASDAQ: FLIR) and initiated a position in the company. FLIR Systems Inc. is the world’s leading provider of thermal cameras that currently has a $7.094 billion market cap. For the past 3 months, FLIR delivered a huge 44.28% return and settled at $54.09 per share at the closing of January 14th.
Here is what Ariel Investments has to say about FLIR Systems Inc. in their Investor Letter:
“In Ariel Appreciation Fund, we initiated a position in the world’s leading provider of thermal cameras, FLIR Systems, Inc. (FLIR). FLIR’s competitive advantages in industrial and defense thermal imaging technology provide an attractive long-term financial profile. The company’s scale combined with a vertically integrated cost structure with a research and development focus, allows it to price products competitively, earn operating margins above peers and consistently reinvest in innovation. Investor concerns around an industrial recession and defense budget cut fears driven by the pandemic provided us with an entry point to own this niche industry leader, with attractive long-term growth and margin prospects.”
Last November 2020, we published an article telling that FLIR Systems Inc. (NASDAQ: FLIR) was in 38 hedge funds’ portfolio, its all time high. FLIR Systems Inc. proved its worth by delivering a 23.41% return YTD.
As of September 2020, Ariel Investments had a 632K share position in FLIR that amounted to $22.6 million. This made Ariel Investments as the top 5 hedge fund that holds most of FLIR’s stake, just behind Adage Capital Management with $32 million worth of FLIR shares, and Arrowstreet Capital with $33.5 million. However, our calculations showed that FLIR Systems Inc. (NASDAQ: FLIR) does not belong to the 30 most popular stocks among hedge funds.
With a 29.56% return in the past month, FLIR Systems Inc. was the top gainer in this year’s first trading day which we included in our article where we talked about the January 4th, Top 10 Gainers.
The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 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 the 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 scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website.
Disclosure: None. This article is originally published at Insider Monkey.
