FAM Funds, an investment management firm, published its ‘FAM Small Cap Fund’ fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 10.10% was recorded by the fund for the year end 2020, underperforming its Russell 2000 benchmark that returned 19.9%. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
FAM Funds, in their Q4 2020 Investor Letter said that they exited their position in Matador Resources Company (NYSE: MTDR) due to the negative effect of the pandemic, but emphasized that they sold it when the price of the stock rebounded and not at its lowest point. Matador Resources Company is an energy company that currently has an $1.7 billion market cap. For the past 3 months, MTDR delivered a massive 116.12% return and settled at $15.28 per share at the closing of January 29th.
Here is what FAM Funds has to say about Matador Resources Company in their investor letter:
“In June, after a decent rebound from the downturn’s scariest moments, we sold our shares in our lone energy holding, Matador Resources (MTDR). The sale of MTDR deserves an explanation. We have long been cautious about investing in oil due to the massive commodity price swings. However, we were so impressed by MTDR’s leadership that we held a modest sized position. Clearly, the swings in 2020’s commodity prices overruled the firm’s management team despite their strength. The huge drop in demand due to COVID and squabbling among the major oil producers triggered a huge price drop. We did not panic-sell at the bottom, but did exit once prices began rebounding.”
Last December 2020, we published an article telling that Matador Resources Company (NYSE: MTDR) was in 16 hedge fund portfolios. Its all time high statistics is 23. MTDR delivered a 4.16% return in the past 12 months.
Our calculations show that Matador Resources Company (NYSE: MTDR) does not belong in our list of the 30 most popular stocks among hedge funds.
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 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
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Disclosure: None. This article is originally published at Insider Monkey.
