ClearBridge Investments, an investment management firm, published its “Value Equity Strategy” first quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Value Equity Strategy had a positive absolute return for the first quarter and outperformed the benchmark Russell 1000 Value Index. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Southwest Airlines Co. (NYSE: LUV), and shared their insights on the company. Southwest Airlines Co. is a Dallas, Texas-based low-cost carrier airline that currently has a $36.2 billion market capitalization. Since the beginning of the year, LUV delivered a 31.06% return, extending its 12-month gains to 67.72%. As of June 01, 2021, the stock closed at $61.35 per share.
Here is what ClearBridge Investments has to say about Southwest Airlines Co. in its Q1 2021 investor letter:
“One of our goals as we constantly monitor the portfolio is to see if we can better deploy capital by lowering the probability of being wrong. This motivation drove our swap of Delta Airlines into Southwest Airlines during the quarter. We expect a huge rebound in airline traffic as COVID-19 concerns abate, but we are much more comfortable that it will be led by leisure travel. Conversely, we are more uncertain of the ultimate level and timing of business travel demand. Southwest, with its simple fare strategy and high leisure travel exposure, is better positioned to capture the ongoing traffic rebound without having to answer the business travel demand question on which Delta is more dependent. As a result, we expect Southwest to play serious offense as it gains share in the rebounding travel market and can fully leverage the massive pent-up demand for travel that we expect. In addition, the U.S. lead in vaccination over Europe favors Southwest over Delta, given the domestic focus of Southwest. COVID-19 has changed many things, but humans by their very nature like to move, and many of them will do it on Southwest.”
lukas-souza-5KRFOTnpnnY-unsplash
Our calculations show that Southwest Airlines Co. (NYSE: LUV) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Southwest Airlines Co. was in 52 hedge fund portfolios, compared to 55 funds in the fourth quarter of 2020. LUV delivered a 5.90% return in the past 3 months.
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.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. 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 homepage.
Disclosure: None. This article is originally published at Insider Monkey.
