If you are looking for the best ideas for your portfolio you may want to consider some of Saber Capital Management’s top stock picks. Saber Capital Management, an investment management firm, is bullish on Facebook Inc (NASDAQ:FB) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Facebook Inc (NASDAQ:FB) stock. Facebook Inc (NASDAQ:FB) is a social media company.
On July 19, 2019, Saber Capital Management had released its Q2 2019 investor letter. Facebook Inc (NASDAQ:FB) stock has posted a return of 46.5% in the trailing one year period, outperforming the S&P 500 Index which returned 17.3% in the same period. This suggests that the investment firm was right in its decision. On a year-to-date basis, Facebook Inc (NASDAQ:FB) stock has risen by 28.5%.
In Q2 2019 investor letter, Saber Capital Management said the fund returned 24.4% in the first half of 2019, outperforming the S&P 500 Index which returned 18.5% in the same period. Let’s take a look at comments made by Saber Capital Management about Facebook Inc (NASDAQ:FB) stock in the Q2 2019 investor letter.
“Our portfolio’s first half result was mostly due to Apple and Facebook. From the time Santa was packing up his sleigh on December 24th just 7 months ago, Apple and Facebook have climbed 39% and 61%, respectively. This represents a total change in market value of a whopping $480 billion between the two companies, which are obviously two of the most widely-followed companies in the world.
As I’ve mentioned before, there is no informational advantage; nothing the market doesn’t know about these two companies. They are the same today as they were last winter. What changed was the sentiment of market participants, which is part of what makes up what I believe is the most sustainable edge in markets today. Saber’s strategy rests on two types of investments: the longterm compounders and the less-exciting but durable businesses that occasionally trade at large discounts to fair value. I’m always hunting for smaller, faster growing companies, but given the nature of markets, we will likely continue to find more obvious opportunities simply by patiently waiting for the “bargains in plain sight”.
Facebook and Antitrust
We invested in Facebook last year (I mentioned my thoughts on this investment in this letter).
I recently talked about Facebook as a guest on The Investor’s Podcast. In the discussion, we talked about Facebook’s business, as well as the antitrust issues facing big tech. There is a view that these firms are anti-competitive. I believe that thousands of small businesses exist solely because of the tools provided by Amazon, Facebook, and Google. Individual merchants can buy their inventory, locate buyers, and then ship the merchandise all by using Amazon’s platform, often without ever interacting with the buyers or even touching the product. Small businesses with a shoestring budget can now compete against much larger brands by utilizing Instagram advertising. If not for the iPhone, there probably would be no Uber. If not for YouTube, no Dollar Shave Club. Many businesses have been created and have thrived, not despite these big tech firms, but in many cases, because of them.
On balance, I think the big tech firms have created an enormous amount of competition and helped spawn a significant amount of vibrant, competitive new businesses. Barriers to entry have never been lower. If you’re an entrepreneur with a good idea, you will not be starved for either capital or access to markets, and you’ll likely use at least one of these big platforms, not because you have to, but because it is to your benefit.
In the podcast, we go into more depth on Facebook’s business, the antitrust topic and the comparison to one of history’s most famous monopolies, which I’d recommend if you’re either interested in my views on Facebook, or in dire need of a power nap. My parents and in-laws, all of whom are loyal Saber investors, claimed it worked wonders for the latter.”
In Q2 2020, the number of bullish hedge fund positions on Facebook Inc (NASDAQ:FB) stock decreased by about 1% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Facebook’s growth potential. Our calculations showed that Facebook Inc (NASDAQ:FB) is ranked #3 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.