Conestoga Capital Advisors, a boutique, independent investment management firm, published its fourth-quarter 2020 ‘Small Cap Growth & SMid Cap Growth’ Investor Letter – a copy of which can be downloaded here. A net return of 31% was recorded by Conestoga’s Small Cap Growth fund and 19.72% return by its SMid Cap Growth Fund for the the end year 2020. Both performed below their Russell 2000 Growth and Russell 2500 Growth benchmarks that delivered a 34.63% and 25.89% return respectively. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Conestoga Capital Advisors, in their Q4 2020 investor letter, emphasized that Watsco, Inc. (NYSE: WSO) is among their SMid Cap Growth Fund’s top 5 laggards. Watsco, Inc. is an Miami Florida-based company that distributes air conditioning, heating and refrigeration units. It currently has a $9.2 billion market capitalization. Since the beginning of the year, WSO is up 5.98%, extending its 12-month gains to 31.30%. As of March 5, the stock closed at $239.66 per share.
Here is what Conestoga Capital Advisors has to say about Watsco, Inc. in their Q4 2020 investor letter:
“WSO is the nation’s largest distributor of heating, ventilation and air conditioning (HVAC) equipment, parts and supplies with 80% of revenue tied to the Sun Belt region. Aided by shelter in place, the company posted its strongest sales growth in over four years during its third quarter. The stock, however, traded sideways during the quarter as we move into winter months.”
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Our calculations show that Watsco, Inc. (NYSE: WSO) 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, Watsco, Inc. was in 24 hedge fund portfolios compared to 29 funds in the third quarter. WSO delivered a 9.09% return in the past 3 months.
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.
