Ruane, Cunniff & Goldfarb LP, an investment management firm, published its ‘Sequoia Fund’ fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 14.68% was recorded by the fund for the Q4 of 2020, outperforming its S&P 500 benchmark that returned 12.15%. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Ruane, Cunniff & Goldfarb, in their Q4 2020 Investor Letter said that they acquired a position in Intercontinental Exchange, Inc. (NYSE: ICE), and remains optimistic to their investment decision. Intercontinental Exchange, Inc. is a regulated futures exchanges and OTC markets operator that currently has a $63.2 billion market cap. For the past 3 months, ICE delivered a 19.29% return and settled at $112.61 per share at the closing of January 28th.
Here is what Ruane, Cunniff & Goldfarb has to say about Intercontinental Exchange, Inc. in their investor letter:
“New investments disclosed during 2020 included Intercontinental Exchange, Inc. ICE is a technology services company that facilitate electronic transactions and sell corporate software. ICE touches a broader swath of the economy, but with a focus on the energy industry. The company is essentially helping to transition various customer activities from analog to digital, it tend to grow faster than the industries it serve and the economy in general. It also provide essential and “sticky” services where high switching costs or network effects make customers reluctant to change vendors. As a result, ICE earns extremely high profit margins and returns on capital, allowing it to grow at attractive and unusually predictable rates while generating prodigious free cash flows. The company has been and will probably remain active and largely successful acquirers of other businesses. A combination of organic growth and returns on likely M&A investments should enable ICE to grow its earnings at double-digit rates over the long term, with what we expect will be relatively low sensitivity to the economic cycle. In each case, we paid a bit more than twenty times expected after-tax earning for our stakes.”
Last December 2020, we published an article telling that Intercontinental Exchange, Inc. (NYSE: ICE) was in 64 hedge fund portfolios, its all time high statistics. ICE delivered a 12.90% return in the past 12 months.
Our calculations show that Intercontinental Exchange, Inc. (NYSE: ICE) does not belong in our list of 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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