Here’s Why NVIDIA Corp. (NVDA) Became a Material Contributor in Vulcan Value’s Q1 Portfolio

Vulcan Value Partners, an investment management firm, published its “Large Cap, Small Cap, Focus Composite, Focus Plus Composite, and All Cap Composite” first quarter 2021 investor letter – a copy of which can be downloaded here. Vulcan’s Large Cap Composite Fund delivered a 7.1% net return for the first quarter of 2021, 20.4% for the Small Cap, 5.5% for both the Focus  Composite and Focus Plus Composite Fund,  and 8.7% return was delivered by its All Cap Composite Fund for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Vulcan Value Partners, in its Q1 2021 investor letter, mentioned NVIDIA Corporation (NASDAQ: NVDA), and shared their insights on the company. NVIDIA Corporation is a Santa Clara, California-based computer systems design services company that currently has a $350.1 billion market capitalization. Since the beginning of the year, NVDA delivered a 7.74% return, extending its 12-month gains to 60.29%. As of May 19, 2021, the stock closed at $562.63 per share.

Here is what Vulcan Value Partners has to say about NVIDIA Corporation in its Q1 2021 investor letter:

NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA to the portfolio.”



Our calculations show that NVIDIA Corporation (NASDAQ: NVDA) 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, NVIDIA Corporation was in 88 hedge fund portfolios, compared to 82 funds in the third quarter. NVDA delivered a -5.15% 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.