Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, recently released its Q4 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 22.75% for the quarter, outperforming its benchmark, the S&P 500 Index which returned 12.15% in the same quarter. You should check out Longleaf Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q4 2020 Investor Letter, the fund highlighted a few stocks and MGM Resorts International (NYSE:MGM) is one of them. MGM Resorts International (NYSE:MGM) is a hospitality and entertainment company operating destination resorts. In the last three months, MGM Resorts International (NYSE:MGM) stock gained 21.6% and on March 25th it had a closing price of $37.96. Here is what the fund said:
“MGM Resorts (54%, 2.10%; 46%, 2.32%), the casino and online gaming company, quickly became a top contributor for the year after we initiated the position in the third quarter. 3Q EBITDA came in moderately above breakeven, a strong improvement from the COVID lockdown-impacted second quarter. MGM’s regional casinos performed very well, while flight restrictions caused its Las Vegas properties to lag. More importantly, CEO William Hornbuckle finished implementing $450 million of necessary recurring annual cost savings, which should result in a 15% increase in pretax earnings once post-vaccine leisure travel resumes and MGM revenues normalize. The stock remains cheap against this post-reopening earnings power. BetMGM, the company’s new online gaming and sports-betting app, is on track for over $150 million revenues this year and growing very quickly in a market with enormous potential. Comparable pure-play digital gaming businesses trade for extremely high multiples today, and BetMGM has a sustainably superior economic model due to its lower customer acquisition costs.”
In Q4 2020, the number of bullish hedge fund positions on MGM Resorts International (NYSE:MGM) stock increased by about 7% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in MGM’s growth potential. Our calculations showed that MGM Resorts International (NYSE:MGM) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 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. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
