Kinsman Oak Capital Partners on Facebook (FB): “FB is a Relative Value Bargain”

Kinsman Oak Capital Partners Inc., an independent Toronto-based boutique investment firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 6.4% was recorded by the fund for the Q4 of 2020, below both its S&P 500 and Russell 2000 benchmark that delivered a 12.2% and 31.4% return respectively, and also underperforming its TSX Composite Index that gained a 14.3% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Kinsman Oak Capital Partners, in their Q4 2020 Investor Letter, said that they have a controversial view on Facebook, Inc. (NASDAQ: FB) because they view it as a ‘not so expensive’ company. Facebook, Inc. is a social network site that currently has a $774.1 billion market cap. For the past 3 months, FB delivered a -1.17% return and settled at $271.87 per share at the closing of February 10th.

Here is what Kinsman Oak Capital Partners has to say about Facebook, Inc. in their Q4 2020 investor letter:

“Our view on Facebook (FB) may be somewhat controversial. The bear case for FB boils down to antitrust risk and valuation. Facebook, although to a lesser degree, is a relative value bargain as well. We believe the company possesses an element of platform risk that Alphabet does not but, compared to the rest of the market, the stock still seems undervalued. We compared Facebook to the Russell 2000, an index full of cyclical businesses that are considered no-brainers at the beginning of a recovery and popular re-opening stocks that are poised to go higher after the vaccine is distributed (Appendix E). Facebook is significantly cheaper, growing faster, has a larger economic moat, superior margin profile, and requires less capex.

In short, we believe the obfuscated earnings power makes Facebook appear more expensive than it really is.”

Just recently, we published a Billionaire Ken Griffin’s Top 10 Stock Holdings article, and Facebook, Inc. (NASDAQ: FB) is included in the list. In our recent data, the company was in 230 hedge fund portfolios, its all time high statistics. FB delivered a 27.55% return in the past 12 months.

Our calculations show that Facebook, Inc. (NASDAQ: FB) ranks 3rd in our list of 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.