Penderfund Capital Management Ltd, an independent, and value-based mutual fund company, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. In their letter, the fund discussed about how to protect the accumulated gains when a certain security sets new highs and some projections of what might come next for frontier investing. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
Penderfund, in their Q4 2020 Investor Letter said that they were able to appreciate the business structure of Zillow Group, Inc. (NASDAQ: ZG), and that made them acquire a position in the company. Zillow Group, Inc. is an online real estate marketplace company that currently has a $34.3 billion market cap. For the past 3 months, Zillow delivered a decent 64.33% return and settled at $152.05 per share at the closing of January 22nd.
Here is what Penderfund has to say about Zillow Group, Inc. in their Investor Letter:
“After reviewing the investment case for Zillow Group Inc. (NASDAQ: ZG), we concluded that their prospects had actually improved. We believed that protecting the potential future gains for clients who understood our strategy (including the capital we ourselves had invested alongside our clients in the Funds) was worth the price of volatility.
As we highlighted at the time, we remained bullish on Zillow because our opinion was that this crisis could very well accelerate a technology-driven re-platforming and digitization of the industry that was already gathering momentum. Likewise PAR could benefit from a re-platforming of the restaurant industry as digitization accelerates… and seems well positioned to thrive in a world where the immense value of integrating online ordering, third party delivery apps and digital payments is being highlighted. These companies offered real world solutions to their customers to deal with the immense pressures unleashed by the pandemic.
These secular growers were beneficiaries of the tsunami of digital acceleration which was sweeping across almost every industry. This meant that there were probably going to be far more potential birds in their respective bushes than even our most bullish scenarios had previously envisioned. This thinking also extended to the breakout digital leaders in other large industries.”
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Last November 2020, we published an article telling that Zillow Group, Inc. (NASDAQ: ZG) was in 69 hedge fund portfolios, its all time high statistics. ZG delivered a massive 223.44% return in the past 12 months.
As of September 2020, Penderfund Capital Management had a 77K share position in ZG that amounted to $10.4 million. However, our calculations showed that Zillow Group, Inc. (NASDAQ: ZG) does not belong to 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.
