Lookback: Tao Value’s 2019 Discovery (DISCA) Thesis

If you are looking for the best ideas for your portfolio you may want to consider some of Tao Value’s top stock picks. Tao Value, an investment management firm, is bearish on Discovery Inc. (NASDAQ:DISCA) stock. In its Q3 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Discovery Inc. (NASDAQ:DISCA) stock. Discovery Inc. (NASDAQ:DISCA) is a mass media company.

On October 30, 2019, Tao Value had released its Q3 2019 investor letter. The investment firm said that Discovery Inc. (NASDAQ:DISCA) was one of the biggest detractors to its performance in Q3 2019. The stock has posted a return of -18.5% in the trailing one year period, underperforming the S&P 500 Index which returned 15.8% in the same period. This suggests that the investment firm was right in its decision.

Tao Value fund posted a return of 1.26% in the third quarter of 2019, underperforming the S&P 500 Index which returned 1.87% in the same quarter. Let’s take a look at comments made by Tao Value about Discovery Inc. (NASDAQ:DISCA) in the Q3 2019 investor letter.

“DISCA – Discovery Inc. contributed -50 bps to our portfolio this quarter. I decided to exit it after holding it since Q1 2018. This is a typical holding period for our “Distressed” category positions. We think the market gradually realized the limited impact of secular “cord-cutting” on content creators, reverting from the overly pessimistic view when I built our position.”

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Last month, we published an article revealing that Andaz Private Investments is bullish on Discovery Inc. (NASDAQ:DISCA) stock. The investment firm believes that the stock is undervalued currently.

In Q2 2020, the number of bullish hedge fund positions on Discovery Inc. (NASDAQ:DISCA) stock decreased by about 9% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Discovery’s growth potential. Our calculations showed that Discovery Inc. (NASDAQ:DISCA) 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 leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. 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.