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 Covetrus Inc. (NASDAQ:CVET) is one of them. Covetrus Inc. (NASDAQ:CVET) provides animal-health technology and services. In the last three months, Covetrus Inc. (NASDAQ:CVET) stock gained 34.2% and on January 19th it had a closing price of $36.55. Here is what Silver Ring Value Partners’ said:
“Business Vision in 5 Years: The distribution business continues to grow at a moderate clip. The company’s Vets First Choice SaaS business both adds a substantial number of new vet practices and meaningfully increases the revenue per practice in the U.S. The company develops a growing business in Europe which is several years behind the U.S. in its maturity. These developments lead to an explosion in profits as the relatively high contribution profit margins from the SaaS business make Vets First Choice the more profitable of the two divisions.
What Can Prevent It From Getting There:
• Market structure changes so that vets give up on selling drugs to consumers, cede that business to others like Chewy’s, and increase prices for their services to maintain practice profitability
• Consolidating suppliers squeeze the economics out of the distribution business
• Vets prove more resistant to adopting Vets First Choice software and the majority never reach the revenue potential that it offers.”
In Q2 2020, the number of bullish hedge fund positions on Covetrus Inc. (NASDAQ:CVET) stock increased by about 9% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Covetrus’s growth potential. Our calculations showed that Covetrus Inc. (NASDAQ:CVET) 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.