If you are looking for the best ideas for your portfolio you may want to consider some of Tao Value’s top stock picks. Tao Value, an investment management firm, is bullish on Pinduoduo Inc. (NASDAQ:PDD) stock. In its Q4 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Pinduoduo Inc. (NASDAQ:PDD) stock. Pinduoduo Inc. (NASDAQ:PDD) engages in the development and management of an e-commerce platform. The stock is up 149.1% since Tao Value’s pitch. Tao Value said the following in the letter:
“We added on our Pinduoduo (PDD) position on its seemingly abysmal earning release day when the price dropped 22%. We believe the misinterpretation by Mr. Market of its branding investing activity as full expense created a great opportunity to add our position. During Q3 19, PDD ramped up aggressively in its marketing expenses, and the management disclosed a very important detail on how they measure their branding investing effectiveness, which is by measuring the behavior change after users use coupons. CEO Colin Huang stated enthusiastically that “…we are pretty happy with the money — every penny we spend. And we’re very happy with reactions of the users…“. Generally, I don’t take 100% of management comment’s face value, however I evaluated the probability of either Huang was lying or being too dumb to design and interpret good A/B tests, are quite low. Retrospectively, it turned out a good buying point as the price has recovered 20% from then to quarter end.”
In Q1 2020, the number of bullish hedge fund positions on Pinduoduo Inc. (NASDAQ:PDD) stock decreased by about 13% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Pinduoduo’s growth potential. Our calculations showed that Pinduoduo Inc. (NASDAQ:PDD) isn’t ranked 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, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the 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.
