Baron Opportunity Fund recently published its fourth-quarter commentary – a copy of which can be downloaded here. During the fourth quarter of 2020, the Baron Opportunity Fund returned 23.02% (institutional shares). In comparison, the benchmark S&P 500 Index was up 12.15%, while the Russell 3000 Growth Index was up 12.41%. You should check out Baron’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q4 2020 Investor Letter, the fund highlighted a few stocks and Farfetch Ltd (NYSE:FTCH) is one of them. Farfetch Ltd (NYSE:FTCH) is an online luxury fashion retail platform. In the last three months, Farfetch Ltd (NYSE:FTCH) stock lost 6.9% and on March 18th it had a closing price of $59.50. Here is what the fund said:
“We invested in Farfetch Limited, a global luxury fashion e-commerce marketplace that connects luxury brands, consumers, and retailers. Led by visionary founder José Neves, the company uses its over 10-year relationships with brands and boutiques to create an unmatched product selection through an attractive asset-light marketplace model, which allows Farfetch to boast over 7 times the selection of its nearest competitor. Its supply is then further differentiated by exclusive content from New Guards Group (a collection of luxury brands like Off-White and Palm Angels). As a result of its differentiated supply, we believe Farfetch should continue winning market share from other online players, like Net-a-Porter, and traditional luxury retailers, like Saks and Neiman Marcus, that do not have their own brands and can only sell what they physically own. As the only global luxury marketplace, Farfetch is also uniquely positioned to benefit from the acceleration of online luxury spending, which according to Bain, is expected to rise from 12% global penetration pre-COVID to 30% by 2025. Capitalizing on the digitization of luxury, Farfetch recently announced a partnership with Alibaba in China, one of the most important and fastest growing luxury markets in the world. Currently under-indexed to China (20% to 25% of Farfetch sales but over one-third of global luxury spending), this is a big white space opportunity for Farfetch. Following the Alibaba deal, we have even greater conviction that Farfetch has durable competitive advantages and is well positioned for long-term growth with an expanding addressable market as more luxury spending moves online.”
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Earlier this month, we published an article revealing that Farfetch Ltd (NYSE:FTCH) was one of the top 5 stock picks of value investor Bill Miller.
In Q3 2020, the number of bullish hedge fund positions on Farfetch Ltd (NYSE:FTCH) stock increased by about 8% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Farfetch’s growth potential. Our calculations showed that Farfetch Ltd (NYSE:FTCH) isn’t ranked among the 30 most popular stocks among hedge funds.
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 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 15 best innovative stocks to buy 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 website:
Disclosure: None. This article is originally published at Insider Monkey.
