Is Charles & Colvard (CTHR) Stock a Buy For 2021?

Silver Ring Value Partners recently released its Q4 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 26.6% for the last 12 months (net), outperforming its benchmark, the Russell 3000 Index which returned 20.9% in the same period. You should check out Silver Ring Value Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q4 2020 Investor Letter, Silver Ring Value Partners’ highlighted a few stocks and Charles & Colvard Ltd (NASDAQ:CTHR) is one of them. Charles & Colvard Ltd (NASDAQ:CTHR) distributes and manufactures jewelry. In the last three months, Charles & Colvard Ltd (NASDAQ:CTHR) stock gained 51.5% and on January 15th it had a closing price of $1.35. Here is what Silver Ring Value Partners’ said:

“Business Vision in 5 Years: Moissanite gains wider acceptance among young consumers. The company strengthens its brand and expands its awareness to a much larger universe of potential customers. It transitions from being primarily a maker of moissanite jewelry to a broader brand that appeals to young consumers. becomes the main channel through which the company does business, with the retail channels carefully curated to offer differentiated products to attract new consumers to the brand. The company is no longer reliant on paid search or mainstream paid-social as customer acquisition channels, and instead develops a strong word of mouth plus low-cost social media approach that allows it to acquire new customers cost effectively. Management is able to substantially increase the repeat-purchase rate among its customers, creating a loyal, recurring source of demand.

What Can Prevent It From Getting There:

• Low-priced Chinese competitors gain traction and market share as consumers don’t see the company’s products as sufficiently differentiated to command a premium

• Synthetic diamonds come down in price where they take share from moissanite and the company is not able to become a meaningful seller of non-moissanite gems

• Competitors box the company out from its customer acquisition channels and management is unable to successfully replace them with new ways of acquiring customers cost-effectively

• Management pursues acquisitions which distract it from executing, damaging the culture and diluting the brand instead of strengthening it.”

Silver Ring Value Partners’ has been a long time Charles & Colvard Ltd (NASDAQ:CTHR) bull. In April 2020, we shared Silver Ring Value Partners’ bullish CTHR thesis in this article.

Our calculations showed that Charles & Colvard Ltd (NASDAQ:CTHR) isn’t ranked among 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

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Disclosure: None. This article is originally published at Insider Monkey.