Giverny Capital, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A net return of 8.68% was delivered by the fund for the Q1 of 2021, outperforming its benchmark that delivered a 6.17% gain in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Giverny Capital, in their Q1 2021 investor letter, mentioned The TJX Companies, Inc. (NYSE: TJX) and shared their insights on the company. The TJX Companies, Inc. is a Framingham, Massachusetts-based department store company that currently has an $82.5 billion market capitalization. Since the beginning of the year, TJX delivered a 0.28% return, extending its 12-month gains to 49.72%. As of April 21, 2021, the stock closed at $68.48 per share.
Here is what Giverny Capital has to say about The TJX Companies, Inc. in their Q1 2021 investor letter:
“We’re pretty happy with the current portfolio and so were not very active during the quarter. Our only consequential decision in the first quarter was to exit the off-price retailer The TJX Companies in January. My prior firm owned TJX for most of the past 20 years and enjoyed appreciation on the order of 20 times the original purchase price.
TJX is a great company, but the growth rate has slowed in recent years and the operating margin has been under pressure, mainly from rising wages for store workers. When the pandemic hit, I bought the stock for GCAM in the belief that if the US fell into a prolonged recession, TJX would be a winner because of its extreme value position.
The US didn’t fall into a prolonged recession. Rather, many consumers are flush with cash thanks to government relief programs. But brick-and-mortar stores are losing out to online competitors for reasons of safety and convenience. TJX has fared much better than most of its competitors during this time and should continue to do so, thanks to its model of buying inventory close to need and reacting to what is happening in the marketplace rather than trying to create hot product. But the stock rose about 50% in the few months we owned it and that increase seemed to price in a complete recovery and more. We sold in early January.”
Our calculations show that The TJX Companies, Inc. (NYSE: TJX) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, The TJX Companies, Inc. was in 68 hedge fund portfolios, compared to 78 funds in the third quarter. TJX delivered a 0.62% return in the past 3 months.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 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. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
