Bonsai Partners recently released its Q1 2021 Investor Letter, a copy of which you can download here. The fund posted a return of -0.8% for the quarter (net of fees), underperforming their benchmark, the S&P 500 Index which returned 6.2% in the same quarter. You should check out Bonsai Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.
In the Q1 2021 Investor Letter, the fund highlighted a few stocks and Micron Technology Inc (NASDAQ:MU) is one of them. Micron Technology Inc (NASDAQ:MU) is a semiconductor company. In the last three months, Micron Technology Inc (NASDAQ:MU) stock lost 8%. Here is what the fund said:
“Micron is a manufacturer of memory semiconductor chips. Micron appreciated 17.3% during the quarter.
With the semiconductor cycle in full swing, sentiment continued to improve for major DRAM and NAND suppliers. Spot pricing for DRAM continues its upward march due to supply shocks across the industry and sustained demand levels that continue to outstrip supply.
As a result, Micron showed improving results for the fiscal first quarter, raised guidance intra-quarter for the fiscal second quarter, and offered strong guidance for the fiscal third quarter in both growth and margins.
While the cyclical nature of DRAM hasn’t changed, the cycles themselves continue to become more benign, leading to long-term economic improvement across these businesses. Micron is now continuously profitable, with industry players in a dramatically stronger position than even just five years ago.
The biggest negative surprise in the quarter came from Micron’s exit from its 3D XPoint hybrid memory business. The company also announced its decision to sell its accompanying Utah fab. Fortunately, this development does not alter the investment thesis much since 3D XPoint was an option ticket for future growth. While it’s unfortunate this product didn’t pan out, now is an excellent time to sell a fab, so perhaps it is a blessing in disguise?”
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Bonsai Partners has been a long time Micron Technology Inc (NASDAQ:MU) bull. In October 2020, we shared Bonsai Partners MU’s thesis in this article.
In Q4 2020, the number of bullish hedge fund positions on Micron Technology Inc (NASDAQ:MU) stock increased by about 27% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in MU’s growth potential. Our calculations showed that Micron Technology Inc (NASDAQ:MU) is ranked #19 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.
