Argosy Investors recently released its Q3 2020 investor letter, a copy of which you can download here. Year-to-date performance was 15.5% in select accounts. The S&P 500 by comparison returned 5.5%. You should check out Argosy Investors’ top 5 stock picks for investors to buy right now as these stocks helped the fund beat the market by 10 percentage points.
In the said letter, Argosy Investors highlighted a few stocks and SelectQuote Inc. (NYSE:SLQT) is one of them. SelectQuote Inc. (NYSE:SLQT) is an insurance company. In the last three months, SelectQuote Inc. (NYSE:SLQT) stock lost 12.1% and on October 15th it had a closing price of $19.34. Here is what Argosy Investors said:
“I sold SelectQuote (SLQT) after owning the stock for less than 3 months, which is highly unusual for us. What I found strange in evaluating the business the more I looked at it was after decades of being in business the company still did not generate significant cash flows despite reported GAAP profits. For a company that essentially acts as an agent or lead generator to insurance companies, they should have been generating far more cash than they were and I elected to sell and admit our mistake.
This is one of those instances where despite its small impact on the portfolio, the rapid upward trajectory of the market places some pressure on all investors to quickly identify attractive investments. This phenomena also applies to positions we own which have appreciated significantly. It is tempting to believe that rapid upward price moves in some of our positions are validations of our investment thesis, but our “great” investment idea may simply be swept up in some form of speculative mania.
To be honest, I really do not enjoy rapid upward price moves (rapid downward ones aren’t very pleasant either) simply because I know that trees don’t grow to the sky and no company is capable of growing faster than its underlying business for any extended period of time, and it is challenging for businesses large enough to be public to sustain growth in excess of 20% for 5+ years, which brings us to our next topic.”
SLQT is a recent addition to the NYSE and it was embraced by 29 hedge funds. George Soros’ hedge fund had the largest hedge fund position in SLQT at the end of June. Overall, though SLQT isn’t a wildly popular stock. Our calculations showed that SelectQuote Inc. (NYSE:SLQT) 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
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Disclosure: None. This article is originally published at Insider Monkey.