In this article, we discuss the 5 stocks that hedge funds were right about in 2021. If you want to read our detailed analysis of these stocks, go directly to Hedge Funds Were Right About These 10 Stocks in 2021.
5. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 106
Year-to-Date Gain in Share Price: 28%
Berkshire Hathaway Inc. (NYSE:BRK-B) is a conglomerate with interests in 69 different businesses. Led by Warren Buffett, it has become the ultimate value holding for investors in a growth-heavy market. The stock has outperformed the tech-laden S&P 500 so far this year by nearly 5 percentage points. With an impressive yield and nearly $150 billion in cash, Berkshire Hathaway Inc. (NYSE:BRK-B) is even stronger when viewed in context of rising inflation and the upcoming hike in interest rates which are likely to lead to a broad correction in valuations of growth companies.
In the trailing twelve month period, Berkshire Hathaway Inc. (NYSE:BRK-B) generated $268 billion in revenue and $87 billion in net income from operating businesses. At the end of the third quarter of 2021, 106 hedge funds in the database of Insider Monkey held stakes worth $19 billion in Berkshire Hathaway Inc. (NYSE:BRK-B).
In its Q1 2021 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and Berkshire Hathaway Inc. (NYSE:BRK-B) was one of them. Here is what the fund said:
“Despite the considerable rise in stock markets over the past year, there are still many attractive opportunities. Human nature also is playing a bit into our hands. Investor crowds often chase popular stocks, hot IPOs, or mysterious SPACs and completely leave aside stocks they consider boring and not sexy enough. A typical example of this category is our long-term largest position in Berkshire Hathaway. Since we bought it for the first time, its price has nearly quadrupled and yet it remains just as undervalued today as it was at that time. Considering the current rate at which it is buying back its own shares and the amount of cash that Berkshire Hathaway has, my greatest wish as a shareholder is for the company’s share price to remain as low as possible for as long as possible.”