Giverny Capital Asset Management LLC, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A net return of 15.39% was recorded by the fund for the Q4 of 2020, above its S&P 500 benchmark that returned 12.15%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
Giverny Capital, in their Q4 2020 Investor Letter said that they see a brighter future in HEICO Corporation (NYSE: HEI) because the company offers cheaper spare aircraft parts compared to the original equipment manufacturers and that accordingly, they will be the top choice of the debt-laden airlines. HEICO Corporation is an aerospace and electronics company that currently has a $15.3 billion market cap. For the past 3 months, HEI delivered a decent 17.23% return and settled at $122.13 per share at the closing of January 26th.
Here is what Giverny Capital Asset Management has to say about HEICO Corporation in their Investor Letter:
“Heico has a large business selling private label aftermarket parts to airlines. Obviously, with commercial jets flying fewer hours the airlines aren’t buying many spare parts. But Heico’s parts tend to cost a lot less than the authorized parts produced by original equipment manufacturers, and as debt-laden airlines will need to mind their pennies in the future, Heico should gain market share for years. It has a second unit selling sophisticated electrical components to the defense, aviation, space and electronics industries. This segment never missed a beat, growing income by 14% in the fourth quarter ended October 31.”
HEI delivered a -3.53% return in the past 12 months. However, our calculations show that HEICO Corporation (NYSE: HEI) 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
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website.
Disclosure: None. This article is originally published at Insider Monkey.