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Is S&P Global (SPGI) a Smart Long-term Buy?

Third Point recently released its Q2 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 10.8% for the quarter, underperforming its benchmark, the S&P 500 Index which returned 20.5% in the same quarter. You should check out Third Point’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Third Point highlighted a few stocks and S&P Global Inc. (NYSE:SPGI) is one of them. S&P Global Inc. (NYSE:SPGI) provides clients with financial information services. Year-to-date, S&P Global Inc. (NYSE:SPGI) stock gained 25.0% and on August 7th it had a closing price of $347.27. Here is what Third Point said:

“Another winner in the quarter was S&P Global, an investment we initiated four years ago. The company looks forward to decades of growth supported by increasing global debt issuance, data consumption, and the shift from active to passive investing. Over the past few years, we have watched the market react to multiple debt issuance pullbacks including the oil price shock in 2014, the Brexit panic, China slowdown fears, and, most recently, the COVID‐19 crisis and, in each case, these dislocations have all proven fleeting and credit markets have come roaring back. This proved true once again in Q2 2020 with record setting issuance across U.S. investment grade and high yield as well as European investment grade, resulting in S&P Global stock rising +35% in the quarter. We believe that cheaper access to liquidity with near‐zero interest rates, a growing refinancing wall in non‐investment grade credit, and nascent huge opportunities in China will continue to drive demand for S&P Global’s essential services. Management’s stewardship remains excellent, with a focus on cost control, prudent reinvestment, and capital allocation. These elements strengthen our view that S&P Global is a highly defensive, long‐term compounder.”

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In Q1 2020, the number of bullish hedge fund positions on S&P Global Inc. (NYSE:SPGI)  stock decreased by about 4% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with S&P Global’s growth potential. Our calculations showed that S&P Global Inc. (NYSE:SPGI) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 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. With Federal Reserve creating trillions of dollars out of thin air, we believe gold prices will keep increasing. So, we are checking out gold stocks like this small gold mining company. We go through lists like the 10 most profitable companies in America 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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