Greenhaven Road Capital recently released its Q2 2020 Investor Letter, a copy of which you can download here. Greenhaven’s estimated returns for the second quarter exceeded +50%, more than markets have returned over many five-year periods. Both funds are up single digits for the year, comparing favorably to the Russell 2000, which ended June down -13% year to date. You should check out Greenhaven Road Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.
In the said letter, Greenhaven Road Capital highlighted a few stocks and KKR & Co. Inc. (NYSE:KKR) is one of them. KKR & Co. Inc. (NYSE:KKR) is an investment management company. Year-to-date, KKR & Co. Inc. (NYSE:KKR) stock gained 20.7% and on July 27th it had a closing price of $35.20. Here is what Greenhaven Road Capital said:
“KKR (KKR) – If there were ever a business that could survive a global pandemic, KKR is it. They have a fortress-like balance sheet with almost half the share price covered by cash and investments, a capital base of more than $200 billion that is locked up well beyond when a vaccine should be available, and a highly variable cost structure. The management team has been very aggressive investing during the pandemic, putting in excess of $12B to work with large investments like their purchase of the commercial beauty business from publicly traded Coty, their carve-out of a waste business from the British firm Pennon, and a €3 billion takeover of Spanish phone carrier MasMovil Ibercom. The transactions are notable because they are large and took place in three different countries and three different industries. On July 8, KKR announced the agreement to purchase insurance company Global Atlantic. This is a meaningful strategic move that will increase their permanent capital base dramatically over time, making the foundation even more rock solid.
These are A-players playing a game where the odds are tilted in their favor. Heads they make some money; tails they make a lot of money. With endowments and others trying to generate high single-digit returns in a world of negative interest rates and volatility in the public markets, the siren song of private equity sings loudly. Even during the pandemic, KKR has been actively raising more than $10B. The company has scale, expertise, and secular tailwinds. Over time, the balance sheet will compound, while management fees and incentive fees should continue marching higher – driving earnings higher along the way.”
This isn’t the first time Greenhaven Road Capital talked about KKR & Co. Inc. (NYSE:KKR) favorably either. The investment firm has been a long time KKR & Co. Inc. (NYSE:KKR) bull. A year ago we shared Greenhaven Road Capital’s bullish KKR & Co. Inc. (NYSE:KKR) thesis in this article.
In Q1 2020, the number of bullish hedge fund positions on KKR & Co. Inc. (NYSE:KKR) stock decreased by about 14% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with KKR’s growth potential. Our calculations showed that KKR & Co. Inc. (NYSE:KKR) 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 scour multiple sources to uncover the next great investment idea. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so we are checking out this under-the-radar lithium stock. 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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.
