Third Point recently released its Q2 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 10.8% for the quarter, underperforming its benchmark, the S&P 500 Index which returned 20.5% in the same quarter. You should check out Third Point’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, Third Point highlighted a few stocks and Amazon.Com Inc (NASDAQ:AMZN) is one of them. Amazon.Com Inc (NASDAQ:AMZN) is a technology company. Year-to-date, Amazon.Com Inc (NASDAQ:AMZN) stock gained 71.4% and on August 7th it had a closing price of $3,167.46. Here is what Third Point said:
“Historically, Amazon was a company we admired that traded outside our valuation range. In March, we initiated a 5% position and although shares were flat on the year, we believed they were significantly undervalued due to the acceleration of the adoption of e‐commerce and cloud computing in the pandemic. We saw that e‐commerce penetration as a percent of total retail sales had nearly doubled and that Amazon was fully participating in that growth. Even as shopping patterns normalize, we believe that e‐commerce penetration has structurally ratcheted up and that Amazon’s share gains will be sticky. The COVID‐19 pandemic is also helping to accelerate the adoption of Amazon’s cloud computing services because they are a critical enabler of remote work, a trend that will similarly outlast the virus.
Amazon possesses all the key characteristics of a great “compounder”, including one of the highest cash returns on capital invested (“CROCI”). Shares are up significantly since March, but our attractive entry price enables us to continue to benefit from the company’s compounding of value as the twin engines of e‐commerce and cloud computing are expected to drive strong growth well into the future.”
Pixabay/ Public Domain
Last month, we published an article revealing that Brown Advisory is bullish about Amazon.Com Inc (NASDAQ:AMZN) stock. The investment firm believes that the company is likely to continue benefiting from the coronavirus pandemic as its business operations are deemed to be essential.
In Q1 2020, the number of bullish hedge fund positions on Amazon.Com Inc (NASDAQ:AMZN) stock increased by about 24% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Amazon’s growth potential. Our calculations showed that Amazon.Com Inc (NASDAQ:AMZN) is ranked #1 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. With Federal Reserve creating trillions of dollars out of thin air, we believe gold prices will keep increasing. So, we are checking out gold stocks like this small gold mining company. We go through lists like the 10 most profitable companies in America 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.
