Sound Shore Management, an investment management firm, published its ‘SSHFX and SSHVX’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 21.03% was recorded by the Sound Shore Fund Investor (SSHFX) fund, and 21.08% by the Institutional (SSHVX) class fund in the fourth quarter of 2020, outperforming its Russell 1000 Value Index and S&P 500 benchmark that delivered a 16.25% and 12.15% returns respectively in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Sound Shore Management, in their Q4 2020 investor letter, mentioned Aptiv PLC (NYSE: APTV) and emphasized their views on the company. Aptiv PLC is an Ireland-based auto parts company that currently has a $41.3 billion market capitalization. Since the beginning of the year, APTV delivered a 17.47% return, impressively extending its 12-month gains to 157.66%. As of March 10, 2021, the stock closed at $148.69 per share.
Here is what Sound Shore Management has to say about Aptiv PLC in their Q4 2020 investor letter:
“As mentioned earlier, periods of uncertainty often create the best opportunities for our strategy. Sound Shore’s ability to remain nimble while preserving a long-term view is a definitive competitive advantage, and increasingly rare in the investment industry. Though we reduced our portfolio’s exposure to original equipment auto manufacturers (OEM) during the selloff in March, we pivoted to opportunities our team identified in the specialty suppliers to the OEMs. One such company is Aptiv, our strongest contributor for the year. Formerly Delphi Automotive, Aptiv is a global technology and parts supplier to the transportation industry that makes electrical and active safety solutions for legacy vehicles as well as for the electric and automated cars of the future. We initiated our position in Aptiv during the market sell-off in March 2020 when the stock pulled back more than 60%. Our investment team has been following the company for a number of years and, given the opportunity to add the name at less than ten times normalized earnings, we acted quickly. Aptiv is a technology-driven business with excellent growth prospects. As global auto demand recovers, Aptiv’s content per vehicle will continue to increase and its business will benefit from the evolution of the automotive industry.”
Our calculations show that Aptiv PLC (NYSE: APTV) 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, Aptiv PLC was in 44 hedge fund portfolios, compared to 38 funds in the third quarter. APTV delivered a decent 23.19% 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.