Distillate Capital recently released its Q1 2020 Investor Letter, a copy of which you can download below. The Distillate Capital’s U.S. Fundamental Stability & Value (U.S. FSV) strategy posted a return of -19.39% for the quarter (net of fees), outperforming its benchmark, the S&P 500 Index which returned -19.60% in the same quarter. You should check out Distillate Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.
In the said letter, Distillate Capital highlighted a few stocks and Expedia Group Inc. (NASDAQ:EXPE) is one of them. Expedia is an online travel shopping company. Year-to-date, Expedia Group Inc. (NASDAQ:EXPE) stock lost 27.0% and on May 27th it had a closing price of $81.61. Here is what Distillate Capital said:
“The biggest addition by weight in the rebalance was Expedia (EXPE), the travel company. While it is clear that the company faces a very challenging near-term environment for travel, the roughly 55% fall in the company’s share price has created a potentially very attractive longer-term opportunity. Against a market cap of just under $8 billion, the company has total debt of around $4.9 billion but offsetting cash of around $4.6 billion, which should help it to withstand near-term challenges. Looking forward, the company is projected to generate well over $1.5 billion of free cash flow per year, which gives it an extremely attractive valuation. Given that companies in our strategy are weighted on the basis of their normalized cash flows, the disconnect between the steep price decline and more stable normalized free cash flows drives a substantial increase in the position weight.”
In Q4 2019, the number of bullish hedge fund positions on Expedia Group Inc. (NASDAQ:EXPE) stock increased by about 59% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with EXPE’s growth potential. Our calculations showed that Expedia Group Inc. (NASDAQ:EXPE) isn’t 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, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“. We interview hedge fund managers and ask them about best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. 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 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.
