Blue Hawk Investment Group recently released its Q2 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 14.06% for the quarter (net), underperforming its benchmark, the S&P 500 Index which returned 19.95% in the same quarter. You should check out Blue Hawk Investment Group’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, Blue Hawk highlighted a few stocks and Splunk Inc (NASDAQ:SPLK) is one of them. Splunk Inc (NASDAQ:SPLK) is a software company. Year-to-date, Splunk Inc (NASDAQ:SPLK) stock gained 30.8% and on August 7th it had a closing price of $200.38. Here is what Blue Hawk said:
“Splunk (SPLK) – SPLK was a new addition to the portfolio in Q1, and it continued its strong performance since entering the portfolio. In the wake of the pandemic, SPLK’s customers – both existing and new – are migrating to the cloud much more quickly than anticipated. Though this acceleration will put pressure on SPLK’s revenue in the near-term – as upfront term license revenue is replaced with ratable services revenue over time – it is a long-term positive in getting to the recurring cloud-based model more quickly than expected. Annual recurring revenue is growing at a 50% clip, and strengthening strategic relationships with Google Cloud and Amazon Web Services are indicative of how SPLK’s offerings are best-in-class. SPLK also continues to win big customer accounts, including Zoom – the posterchild of the post-pandemic world. The market understands the strength of a recurring revenue cloud-based software revenue model, but we believe that investors are still too conservative on SPLK’s future. We believe that SPLK will earn over $2B in free cash flow over a 5-year horizon, implying a very reasonable valuation with significant upside, for a long-term and patient investor. Given the strong growth that we project SPLK to still be generating over the next several years, we believe this valuation is quite attractive. Following another strong quarterly report that buoyed our conviction, we added to the position, making it a top-ten holding in the fund as of quarter-end.”
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This isn’t the first time Blue Hawk talked about Splunk Inc (NASDAQ:SPLK) favorably either. The investment firm has been a long time Splunk Inc (NASDAQ:SPLK) bull. In April, we shared Blue Hawk’s bullish Splunk Inc (NASDAQ:SPLK) thesis in this article.
In Q1 2020, the number of bullish hedge fund positions on Splunk Inc (NASDAQ:SPLK) stock decreased by about 3% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Splunk’s growth potential. Our calculations showed that Splunk Inc (NASDAQ:SPLK) 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
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Disclosure: None. This article is originally published at Insider Monkey.
