5 Best Value Stocks to Buy for 2021

4. Alphabet Inc (NASDAQ: GOOG)

The hedge fund held a position in Alphabet since 2014 and it appears that Tom Russo’s stock-picking strategy worked for the hedge fund. This is because shares of Alphabet rallied 200% in the last five years. It is the fourth largest stock holding of Gardner Russo & Gardner’s portfolio.

Kinsman Oak Capital Partners Inc., which generated a return of 6.4% for the fourth quarter, highlighted few stocks including Alphabet in the Q4 investor’s letter. Here’s what Kinsman Oak Capital Partners said:

“Our view on Alphabet (GOOG) may be somewhat controversial. The bear case for GOOG boils down to antitrust risk and valuation. Our thesis is predicated on the belief that real earnings power, especially for Alphabet, is higher than it appears on the surface. At first glance, Alphabet’s P/E appears to be 30.2x. Adjusting for net cash brings this down to 27.9x. Alphabet’s “Other Bets” segment generates de minimis revenues but reduces operating income by 13%. Adjusting for that (and assigning zero value to a segment that includes Waymo, Nest, and Verily) brings the multiple to 24.7x versus the S&P 500 trading at 22.3x.”