Alger Mid Cap Focus Fund recently released its Q4 2020 Investor Letter, a copy of which you can download here. Class Z shares of the Alger Mid Cap Focus Fund outperformed the Russell Midcap Growth Index during the fourth quarter of 2020. You should check out Alger Mid Cap Focus Fund’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q4 2020 Investor Letter, Alger Mid Cap Focus Fund highlighted a few stocks and Farfetch Ltd (NYSE:FTCH) is one of them. Farfetch Ltd (NYSE:FTCH) is an online luxury fashion retail platform. In the last three months, Farfetch Ltd (NYSE:FTCH) stock gained 82.9% and on January 29th it had a closing price of $61.24. Here is what Alger Mid Cap Focus Fund said:
“Farfetch is a global luxury e-commerce marketplace. The company’s stock outperformed during the fourth quarter due to a stronger-than-expected earnings report for the three-month period ended September 30 and an announcement of a partnership with Alibaba Group to accelerate Farfetch’s expansion into China. Farfetch reported accelerating revenue growth that was above street expectations and profit results that indicated the company was nearing breakeven faster than expected. We believe Farfetch benefitted from the pandemic accelerating the shift of luxury consumption from brick-and¬mortar stores to online channels.
With e-commerce representing only 12% of total luxury sales in 2019. 2020 appears to be a jumpstart for luxury online penetration. and Farfetch is a key beneficiary of this trend. Regarding Alibaba, Farfetch is creating a Farfetch China joint venture. in which the Chinese e-commerce giant and Switzerland-based luxury goods company Richemont would be investors. Farfetch will hold a 75% stake in the resulting joint venture. Alibaba and Richemont will also invest in the Farfetch Company. The arrangement allows Richemont. Alibaba and Farfetchto collaborate on luxury goods sales within China through a new strategy called new luxury retail, consisting of e-commerce and reimagined brick-and-mortar retail formats.
Additionally. Farfetch’s e-commerce platform will get a shopping button for its luxury store on Tmall, an online retailer operated by Alibaba. Given that Farfetch can tap into more than 20 times the amount of luxury inventory as Alibaba, we believe this partnership has strong potential as the selection of luxury items online is dramatically improving, thereby enhancing customer conversion and overall luxury e-commerce revenues. The arrangement also gives Farfetch access to Alibaba’s immense 750 million shopper network. We would note that Farfetch had nearly three million shoppers on its platform at the end of 2020 vs Alibaba at over 750 million, so the potential for the partnership is significant. Farfetch’s button is slated to go live on Alibaba in mid to late 2021.”
In Q3 2020, the number of bullish hedge fund positions on Farfetch Ltd (NYSE:FTCH) stock increased by about 8% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Farfetch’s growth potential. Our calculations showed that Farfetch Ltd (NYSE:FTCH) 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.