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 Discovery Inc. (NASDAQ:DISCA) is one of them. Discovery Inc. (NASDAQ:DISCA) is a mass media company. In the last three months, Discovery Inc. (NASDAQ:DISCA) stock gained 79% and on January 19th it had a closing price of $36.15. Here is what Silver Ring Value Partners’ said:
“Business Vision in 5 Years: The company has successfully transitioned from being distributed primarily by cable and satellite companies to a combination of traditional distributers and direct to consumer streaming packages. Its brands have strengthened due to careful content curation and wider awareness. Its direct to consumer rollout made management realize that they have a large, inelastic audience that is happy to pay for its unique content in many markets. The decline in pay TV subscribers has ended as those who wanted to leave the ecosystem did and the remaining large portion of the population is happy to pay for a more streamlined bundle. The company is able to maintain and grow its advertising revenue stream while substantially increasing its distribution revenues.
What Can Prevent It From Getting There:
• Competing content from Netflix, YouTube and other internet sources weakens the company’s brands and makes its content less compelling to viewers.
• The direct to consumer rollout makes management realize that there is only a small core audience that is willing to pay for its content directly in amounts that make the economics worthwhile.
• The surge in streaming offerings to consumers precipitates a quick breakdown of the pay TV ecosystem, which is replaced by a direct to consumer model that only replaces a fraction of the old revenues.”
In Q2 2020, the number of bullish hedge fund positions on Discovery Inc. (NASDAQ:DISCA) stock decreased by about 9% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Discovery’s growth potential. Our calculations showed that Discovery Inc. (NASDAQ:DISCA) 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
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.