Miller Value Partners recently released its Q1 2020 Investor Letter, a copy of which you can download here. The Miller Value Partners Opportunity Equity Fund posted a return of -38.4% for the quarter (net of fees), underperforming its benchmark, the S&P 500 Index which returned -19.6% in the same quarter. You should check out Miller Value Partners top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.
In the said letter, Miller Value Partners highlighted a few stocks and OneMain Holdings Inc. (NYSE:OMF) is one of them. OneMain Holdings is a financial services company. Year-to-date, OneMain Holdings Inc. (NYSE:OMF) stock lost 39.2% and on June 10th it had a closing price of $27.67. Here is what Miller Value Partners said:
“OneMain Holding Inc. (OMF) declined 51.7% during the period as investors worried about the potential negative economic impact from the coronavirus outbreak. The company issued a report on their current business position noting that they have $4.4B in cash which they believe is sufficient to run operations under numerous stress cases through 2021 along with $6B of unencumbered collateral and $3.6B undrawn and committed conduit lines that they can draw if needed. They reiterated that they expect to maintain profitability even in a 2008/2009 type of downturn. There has been a string of insider buying with the Chairman, Jay Levine, purchasing 30k shares and the CEO, Doug Shulman, purchasing 3.25k shares and a Director, Richard Smith, buying 2k shares. In addition, the company increased their buyback program from $100M to $200M, which represents ~8% of shares outstanding. The company reported 4Q results which beat the highest estimates. The company reported adjusted EPS of $1.96 versus $1.74 expected with net charge-offs of 5.71% versus 6.30% last year. The company increased their regular quarterly dividend to $0.33 and announced a special dividend of $2.50.”
In Q1 2020, the number of bullish hedge fund positions on OneMain Holdings Inc. (NYSE:OMF) stock decreased by about 13% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with OMF’s growth potential. Our calculations showed that OneMain Holdings Inc. (NYSE:OMF) isn’t ranked 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
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:
Disclosure: None. This article is originally published at Insider Monkey.