Is XPO Logistics (XPO) A Smart Long-Term Buy?

Adestella Investment Management, a long/short equity investment management firm, published its fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 24.8% was recorded by the fund in the fourth quarter of 2020 and 93.3% for the whole year, outperforming its S&P 500 benchmark that delivered a 12.1% and 18.4% returns respectively in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Adestella Investment Management, in their Q4 2020 investor letter, mentioned XPO Logistics, Inc. (NYSE: XPO) and emphasized their views on the company. XPO Logistics, Inc. is a Greenwich, Connecticut–based transportation and contract logistics company that currently has a $12.4 billion market capitalization. Since the beginning of the year, XPO delivered a 2.58% return, impressively extending its 12-month gains to 97.72%. As of March 11, 2021, the stock closed at $122.27 per share.

Here is what Adestella Investment Management has to say about XPO Logistics, Inc. in their Q4 2020 investor letter:

“XPO Logistics (XPO) – the XPO thesis was very simple, but it proved very successful. As the stock irrationally sold off in the spring and made only a tepid recovery in the following months, we were able to buy into a well-operated business with plenty of growth drivers at a compelling price. Sentiment surrounding the company improved thanks to a strong earnings, the resumption of asset sale plans that had been shelved in the spring, and the announcement of a spinoff to unlock the SOTP value. As the stock approached our estimate of a $115 fair value, we exited with more than a clean double from our cost basis.”

Biggest Logistics Companies in the World

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Our calculations show that XPO Logistics, Inc. (NYSE: XPO) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, XPO Logistics, Inc. was in 40 hedge fund portfolios, compared to 39 funds in the third quarter. VG delivered a 1.16% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 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. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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