Wasatch Core Growth Fund recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 6.61% for the quarter, outperforming its benchmark, the Russell 2000 Index which returned 4.93% in the same quarter. You should check out Wasatch’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q3 2020 Investor Letter, Wasatch highlighted a few stocks and Five9 Inc. (NASDAQ:FIVN) is one of them. Five9 Inc. (NASDAQ:FIVN) is a software company. Year-to-date, Five9 Inc. (NASDAQ:FIVN) stock gained 184.6% and on December 22nd it had a closing price of $186.65. Here is what Wasatch said:
“One of the tech companies we like is Five9, Inc. (FIVN), which provides contact-center software that’s managed and hosted from the cloud. The company offers real-time and historical reporting, quality monitoring, and workforce and customerrelationship-management integrations. The stock has benefited from the superiority of cloud-based software over on-premises/legacy software, which has become especially evident during the coronavirus pandemic. Five9’s robust software has enabled customers to quickly shift employees from large contact centers to work-from-home environments with limited disruption.
On a longer-term basis, Five9 has a few competitive advantages that make it the dominant growth company in its industry. First, Five9 offers compelling products that address mission-critical customer needs, and the company has been leveraging these products with high research-anddevelopment spending. This has resulted in technological leadership, which has created a barrier to entry that may prevent competitors from gaining a foothold. Second, the company has been enhancing its products for reliability, functionality and scalability at the enterprise level—thereby opening new revenue opportunities. Third, in our estimation, Five9’s leadership team has talent and depth at the home office and at the regional levels, and the company has created a culture that attracts and retains best-in-class personnel.
Although Five9 has been extremely successful during the pandemic and the stock price reflects this success, we believe the company and the stock still have considerable upside potential. The market is large and expanding, and Five9’s competitive advantages are becoming stronger. Customers, for their part, have every incentive to maintain a longterm, mutually beneficial relationship with Five9 because they receive cost-effective prices, almost zero downtime, easy integration with other software platforms, and reporting systems that help manage full-time and seasonal staff across multiple time zones and geographies.”
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In Q3 2020, the number of bullish hedge fund positions on Five9 Inc. (NASDAQ:FIVN) stock increased by about 7% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in FIVN’s growth potential. Our calculations showed that Five9 Inc. (NASDAQ:FIVN) isn’t ranked among 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
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:
Disclosure: None. This article is originally published at Insider Monkey.
