Distillate Capital, an employee-owned investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 19.22% was recorded by the fund for the Q4 of 2020, above both its S&P 500 benchmark that returned 18.4% and the Russell 1000 Value ETF that delivered a 2.67% return. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
Distillate Capital, in their Q4 2020 Investor Letter said that they are optimistic in The Home Depot, Inc. (NYSE: HD), and that they acquired a position in the company. The Home Depot, Inc. is a home improvement company that currently has a $304.2 billion market cap. For the past 3 months, HD delivered a 4.78% return and settled at $282.60 per share at the closing of January 26th.
Here is what Distillate Capital has to say about The Home Depot, Inc. in their Investor Letter:
“One of the biggest additions to the portfolio in the rebalance was Home Depot, Inc. The company underperformed the S&P 500 Index last quarter even though its free cash flow estimates increased. Because the portfolio’s weighting methodology is linked to free cash flow, position sizes increased to reflect improving fundamentals relative to prices, and the more attractive valuations that result.”
Last December 2020, we published an article telling that The Home Depot, Inc. (NYSE: HD) was in 73 hedge fund portfolios. Its all time high statistics is 91. HD delivered a decent 20.76% return in the past 12 months.
Our calculations shows that The Home Depot, Inc. (NYSE: HD) 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.