Artko Capital recently released its Q4 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 17.2% for the quarter, outperforming its benchmark, the S&P 500 Index which returned 12.2% in the same quarter. You should check out Artko Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.
In the Q4 2020 Investor Letter, Artko Capital highlighted a few stocks and Northern Technologies International Corp (NASDAQ:NTIC) is one of them. Northern Technologies International Corp (NASDAQ:NTIC) is a packaging and containers company that produces corrosion inhibitors and removers. In the last three months, Northern Technologies International Corp (NASDAQ:NTIC) stock gained 64.8% and on February 3rd it had a closing price of $13.60. Here is what Artko Capital said:
“Northern Technologies(NTIC ) – NTIC was up over 20% in the last quarter of the year, and an additional 40% in 2021 so far. Along with our investments in Currency Exchange International (CURN), Hire Quest (HQI) and Potbelly (PBPB) our investment in NTIC is part of our “the world will eventually reopen” theme of cyclical investments. Last year we patiently added to this stock in the mid $8’s as our estimate of the margin of safety in the form of the balance sheet liquidation value of over $7 per share made the NTIC stock price offered by the market a very lucrative risk reward proposition. As a reminder, NTIC has two products, Zerust, which serves the oil and gas markets as an anti-corrosion chemical; and Natur-Tec which is a compostable plastic product line. Many of the large users of compostable products include the apparel industry, college campuses, stadiums, arenas, restaurant, and corporate office complexes. These institutions are expected to be some of the last businesses to reopen. Many of them have still not announced reopening plans. However, the near-term pandemic created headwinds are most certainly expected to be overcome and ride the longer term tailwinds of mass adoption of compostable plastic solutions. The 4 th quarter saw a sequential growth of 36% in Natur-Tec revenues as the market began to slowly rebound.
The other leg of growth for NTIC, that conducts a large portion of its business through a fairly capital light, global JV model, is coming from China and other Asian countries. The fourth calendar quarter net sales by NTIC’s China subsidiary increased 17.7% to a quarterly record of $4.5 million and were up 32.3% from the calendar 2020 third quarter. With plastic pollution becoming an exponentially bigger problem in Asia, we view this as one of the more important legs of our thesis and look forward to seeing the potential here. Finally, we believe that with the recent listing of Danimer Scientific (DNMR), a close bioplastic manufacturing competitor, and highlighted by the venerable David Einhorn of Greenlight in his recent investor letter, NTIC has begun getting the associated attention as a participant in the hot “sustainability investing” trend of today’s markets which will likely continue to drive the stock to new highs.”
Artko Capital has been a long time Northern Technologies International Corp (NASDAQ:NTIC) bull. In November 2020, we shared Artko Capital’s bullish NTIC’s thesis in this article.
In Q3 2020, the number of bullish hedge fund positions on Northern Technologies International Corp (NASDAQ:NTIC) stock remained unchanged from the previous quarter (see the chart here). Our calculations showed that Northern Technologies International Corp (NASDAQ:NTIC) 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.