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Biglari Holdings (BH) Has Fallen 11% in Last One Year, Underperforms Market

If you are looking for the best ideas for your portfolio you may want to consider some of Maran Capital Management’s top stock picks. Maran Capital Management, an investment management firm, is bearish on Biglari Holdings Inc. (NYSE:BH) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Biglari Holdings Inc. (NYSE:BH) stock. Biglari Holdings Inc. (NYSE:BH) is a holding company, which engages in media, restaurant, and property and casualty insurance businesses.

On July 24, 2019, Maran Capital Management had released its Q2 2019 investor letter. Biglari Holdings Inc. (NYSE:BH) stock has posted a return of -11.5% in the trailing one year period, underperforming the S&P 500 Index which returned 13.2% in the same period. This suggests that the investment firm was right in its decision to sell the stock in Q2 2019. On a year-to-date basis, Biglari Holdings Inc. (NYSE:BH) stock has fallen by 14.4%.

In Q2 2019 investor letter, Maran Capital Management said the fund posted a return of 2.8% in the second quarter of 2019, underperforming fund’s benchmark the S&P 500 Index which returned 4.3% in the same period. Let’s take a look at comments made by Maran Capital Management about Biglari Holdings Inc. (NYSE:BH) stock in the Q2 2019 investor letter.

“Biglari Holdings (BH) is extremely cheap (recent price: $96/sh, liquidation value: $300+/sh), yet has no catalyst as the management team doesn’t seem interested in narrowing the gap to intrinsic value in the short term (though the chairman did buy a reasonable amount of stock personally late in Q2). I sold half of our position during late 1Q/early 2Q, and given the decline in the shares since then, it has now become a small position.

Despite being cheap and unlevered, it did not meet all of my risk management criteria for averaging down, and thus I did not add to the position over time. While BH was a mistake and has detracted from results, the pain was not compounded.”

Kzenon/Shutterstock.com

In Q1 2020, the number of bullish hedge fund positions on Biglari Holdings Inc. (NYSE:BH) stock decreased by about 9% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Biglari’s growth potential. Our calculations showed that Biglari Holdings Inc. (NYSE:BH) 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 leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. 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. 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.