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 Opendoor Technologies Inc. (NASDAQ:OPEN) is one of them. Opendoor Technologies Inc. (NASDAQ:OPEN) is an online real estate company. In the last three months, Opendoor Technologies Inc. (NASDAQ:OPEN) stock lost 6.4% and on March 17th it had a closing price of $28.30. Here is what the fund said:
“Opendoor Technologies Inc. operates the leading “iBuying” digital platform in the U.S. enabling consumers to buy and sell homes instantly. On Opendoor, home buyers can tour properties virtually, make offers, and receive financing, while sellers can receive express cash offers on their homes with flexible close dates. In our view, Opendoor can be one of several winners in a massive and highly fragmented industry, with the company’s 2019 revenue of $4.7 billion representing less than 0.5% share of the $1.3 trillion in addressable U.S. residential real estate sales annually. This view is driven by our conviction that the one-stop shop iBuyer model is a vastly simpler experience for home buyers and sellers and will attract increasing consumer adoption to Opendoor. It is further bolstered by Opendoor’s impressive Net Promoter Score of 70.
Looking ahead, we expect tailwinds not only from increasing iBuyer adoption but also from Opendoor’s geographical expansion to over 100 markets from 21 currently, as well as its growing suite of ancillary offerings beyond title/escrow, mortgages, and automated closing processes to include home warranty, renovations, insurance, moving services, and more. Over time, we believe Opendoor can reach mid- to high-single-digit contribution margins per home vs. 4% in its most mature markets today driven by increasing attach rates of ancillary services. Today, 90% of Opendoor’s current markets are contribution margin positive, and as the company scales further and adds ancillary offerings, we expect improving unit economics to drive EBITDA breakeven by 2023.”
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Our calculations showed that Opendoor Technologies Inc. (NASDAQ:OPEN) 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.
