Dow (DOW) Has Risen 5% in Last One Year, Underperforms Market

If you are looking for the best ideas for your portfolio you may want to consider some of GDS Investments top stock picks. GDS Investments, an investment management firm, is bearish on Dow Inc. (NYSE:DOW) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Dow Inc. (NYSE:DOW) stock. Dow Inc. (NYSE:DOW) is an American commodity chemical company.

In July 2019, GDS Investments had released its Q2 2019 investor letter. The investment firm said it exited its position from Dow Inc. (NYSE:DOW) stock in Q2 2019. Dow Inc. (NYSE:DOW) stock has posted a return of 4.5% in the trailing one year period, underperforming the S&P 500 Index which returned 10.9% in the same period. This suggests that the investment firm was right in its decision. On a year-to-date basis, Dow Inc. (NYSE:DOW) stock has fallen by 8.0%.

Let’s take a look at comments made by GDS Investments about Dow Inc. (NYSE:DOW) stock in the Q2 2019 investor letter.

“After that separation, we divested Dow from the GDS Investments portfolio. The nature of the products which a stand-alone Dow sells require high volumes with low margins and a very limited ability to raise prices beyond market rates… in other words, it is a classic commodity business. Our objective is to own high-quality companies which are undervalued in the market. We concluded that the stand-alone Dow is not such a company and sold our holdings.”

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In Q2 2020, the number of bullish hedge fund positions on Dow Inc. (NYSE:DOW) stock decreased by about 8% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Dow’s downside potential. Our calculations showed that Dow Inc. (NYSE:DOW) 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

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Disclosure: None. This article is originally published at Insider Monkey.