Cooper Investors, an employee-owned investment company that manages 7 pooled investment trusts, published its Cooper Investors Global Equities Fund (Hedged) third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A positive return of 9.18% was recorded by the fund for the 3rd Quarter of 2020, ahead of its MSCI All Countries World benchmark that returned 6.94%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
Cooper Investors, in their Q3 2020 Investor Letter, talked about Intercontinental Exchange, Inc. (NYSE: ICE). Intercontinental Exchange, Inc. is a platform that connects the largest community of participants in all major markets, that currently has a $64.654 billion market cap. For the past 3 months, ICE delivered a 13.71% return and settled at $115.19 per share at the closing of January 15th.
Here is what Cooper Investors has to say about Intercontinental Exchange, Inc. in their Investor Letter:
“During the quarter Intercontinental Exchange (“ICE”, US$56bn market cap) announced and completed the acquisition of mortgage origination platform Ellie Mae. The deal is material in size at ~US$11bn as compared to ICE’s ~US$60bn Enterprise Value. Before discussing the deal it is worth giving a little context.
ICE is run by CEO and Founder Jeff Sprecher who acquired the foundation assets for the businesses 20 years ago for just $1. Through savvy capital allocation and operational knowhow Jeff has built the preeminent financial information and exchange group. ICE’s modus operandi can be summarised as finding analogue markets and applying digital and technology solutions to significantly increase their efficiency.
A clear example of this is the acquisition of the New York Stock Exchange in 2013. At that point, the NYSE had not invested in their trading systems and were losing share to more technically advanced exchanges. ICE took control of the asset and implemented their best-in-class exchange technology, restoring NYSE’s position as the pre-eminent listing and trading venue for equities.
Jeff and his team were also early movers in building a financial data business. They recognised that financial exchange revenue is dependent on trading volumes which can be uncertain in the near term depending on the whims of market participants. However the data used to inform the trading decision has a much more stable demand profile and can be used for trading, pricing and risk management. Off the back of this insight, through acquisition and internal investments ICE has built a leading financial data business which is highly complementary to their financial exchange business.
These sorts of deals are truly proprietary and can create significant value for shareholders. The long term vision, operational and capital allocation prowess required to execute them is quite rare. One area we tend to find this sort of thinking is in Family and Founder-led companies and so with regards to our ICE investment, we had identified a deal of this nature as a key source of value latency.
ICE’s journey in the mortgage space started four years ago as they acquired some smaller assets which provide discrete solutions across the origination process. Over this period management learnt how the industry worked and where the inefficiencies were.”
Last December 2020, we published an article telling that Intercontinental Exchange, Inc. (NYSE: ICE) was in 64 hedge funds’ portfolio, its all time high statistics. Intercontinental Exchange, Inc. proved its worth by delivering a 19.03% return for the past 12 months.
Our calculations showed that Intercontinental Exchange, Inc. (NYSE: ICE) does not belong to the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 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
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