North Carolina-based asset management firm Massif Capital, LLC released its second-quarter investor letter this month – a copy of which is available for download here. The fund is currently being co-managed by Will Thomson and Chip Russell. In their recent letter to investors, Massif Capital announced that the core portfolio was up 18.3% in the second quarter. In the first six months of 2020, the fund has returned 21.9%. You should check out Massif Capital’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, Massif Capital highlighted a few stocks and Star Bulk Carriers Corp (NASDAQ:SBLK) is one of them. Star Bulk Carriers Corp (NASDAQ:SBLK) is a global ship manager of seaborne transportation. Year-to-date, Star Bulk Carriers Corp (NASDAQ:SBLK) stock lost 47.0% and on July 9th it had a closing price of $6.29. Here is what Massif Capital said:
“Starbulk is our only real COVID19 victim. The position was entered at the start of the year based on the firm’s industry-leading position in the dry bulk shipping industry, the quality of its fleet, managements investment in upgrading its fleet to deal with new fuel-related regulations and its optionality to a potential strengthening dry bulk market in the form of significant spot market exposure.
Unfortunately, the global economy and global trade came to a halt, and with it, the stocks of all the dry bulk shippers. The companies kept shipping, but the shares took a negative turn.
As Starbulk bottomed (which at the time we did not know was the localized bottom), we re-examined our thesis. We determined that there was no obvious catalyst to turn the market’s opinion of the company. We also thought, given its leverage to a growing economy heavily dependent on trade, the firm’s outlook may have changed in ways difficult to understand or foresee. Reshoring of supply lines, slowing globalization, increasing trade tensions, all seemed risks before COVID19 but seemed even more, pressing now in the wake of the pandemic. All these concerns are still valid, but as soon as we sold the stock, it rallied roughly 25%. In our postmortem of the trade, we struggle to see how we could have made any decision other than the one we made.”
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In Q1 2020, the number of bullish hedge fund positions on Star Bulk Carriers Corp (NASDAQ:SBLK) stock decreased by about 31% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Star Bulk’s upside potential. Our calculations showed that Star Bulk Carriers Corp (NASDAQ:SBLK) 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
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February 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.
