L1 Capital Long Short Fund released its Q3 2020 Investor Letter, a copy of which you can download here. The Fund posted a return of 8.8% for the quarter, underperforming the S&P 500 Index which returned 8.93% in the same quarter. You should check out L1 Capital Long Short Fund’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, L1 Capital Long Short Fund highlighted a few stocks and News Corp (NASDAQ:NWS) is one of them. News Corp (NASDAQ:NWS) is a media and information services company. In the last one year, News Corp (NASDAQ:NWS) stock gained 30% and on January 7th it had a closing price of $18.74. Here is what L1 Capital Long Short Fund said:
“News Corp (NWS Long +12%) shares rallied after reporting a strong FY20 result with all key divisions materially ahead of market expectations. News Corp provided additional disclosure around the Dow Jones assets (including the Wall Street Journal) bringing further visibility to the significant value of these assets as compared to listed peers such as the New York Times. If we apply the New York Times’ earnings multiple to the Dow Jones assets it would imply a stand-alone valuation of ~US$7b. We continue to believe News Corp is materially undervalued with the REA interest combined with their net cash position exceeding their current market cap of ~US$8.4b. This implies the remaining media, publishing and real estate assets, including the above-mentioned Dow Jones assets, currently valued at roughly zero. News Corp management are taking progressive steps to better highlight the underlying value of the assets and simplify the corporate structure which we believe will continue to unlock value going forward.”
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In Q3 2020, the number of bullish hedge fund positions on News Corp (NASDAQ:NWS) stock decreased by about 13% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in NWS’s growth potential. Our calculations showed that News Corp (NASDAQ:NWS) 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.
