Confluence Investment Management recently released its Q1 2020 Investor Letter, a copy of which you can download below. The All Cap Value Fund posted a return of -22.4% for the quarter (net of fees), outperforming its benchmark, the Russell 3000 Value Index which returned -27.3% in the same quarter. You should check out Confluence Investment Management’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.
In the said letter, Confluence Investment Management highlighted a few stocks and Nordson Corp (NASDAQ:NDSN) is one of them. Nordson designs and manufactures dispensing equipment for consumer and industrial adhesives, sealants and coatings. Year-to-date, Nordson Corp (NASDAQ:NDSN) stock gained 7.0% and on May 22nd it had a closing price of $174.15. Here is what Confluence Investment Management said:
“Nordson Corporation was also added during the quarter. Nordson is a well-run industrial company with leading positions in its niches of operation, which pertain to fluid handling and precision dispensing. The company’s operating margins are among the best in the industrial complex as are its returns on assets and equity. One reason the company has been so successful is that its products and services allow customers to be more efficient and productive. Customers can easily ascertain and calculate their returns on investment for Nordson products (reduced downtime, materials savings, faster line speeds, reduced labor, etc.). In a world of better, faster, cheaper, and smaller, Nordson is a key facilitator. The company also has a large installed base across a diverse group of end markets and customers, with well-entrenched exposure to several durable segments of the economy like canned goods, packaging, diapers, and feminine hygiene. These less cyclical businesses are balanced with exposure to higher growth areas of the economy like technology. For example, it should be a key facilitator as production lines reposition for 5G technology and new form factors emerge. The company has been deleveraging from recent acquisitions and is once again positioned to conduct accretive M&A, which has been a successful element of the company’s growth strategy in recent years. We expect this to continue under new leadership from Illinois Tool Works.”
In Q4 2019, the number of bullish hedge fund positions on Nordson Corp (NASDAQ:NDSN) stock increased by about 81% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with NDSN’s growth potential. Our calculations showed that Nordson Corp (NASDAQ:NDSN) isn’t 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 leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we asked astrophysicist Neil deGrasse Tyson about Tesla, Elon Musk, and his top stock picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 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.
