Oakmark Funds: “Pinterest (PINS) Proved to be a Pandemic Winner”

Oakmark Funds, a long-term value investment management firm, published its “Oakmark Global Fund” fourth quarter 2020 investor letter – a copy of which can be seen here. A return of 29.45% was recorded by the fund in the fourth quarter of 2020, outperforming both its MSCI World benchmark that had a 14.0% gain, and its Lipper Global Fund Index that delivered a 16.2% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Oakmark Global Fund, in their Q4 2020 investor letter, mentioned Pinterest, Inc. (NYSE: PINS) and emphasized their views on the company. Pinterest, Inc. is a San Francisco, California-based social media service that currently has a $43.4 billion market capitalization. Since the beginning of the year, PINS delivered a 4.81% return, impressively extending its 12-month gains to a massive 362.32%. As of March 26, 2021, the stock closed at $69.07 per share.

Here is what Oakmark Global Fund has to say about Pinterest, Inc. in their Q4 2020 investor letter:

“We have only held Pinterest since February 2020; the company did not even go public until 2019. Pinterest operates a website where users can get ideas and information about personal interests. Users actively seek relevant commercial content, meaning that they are fundamentally aligned with advertisers, a factor not generally seen in other media platforms. Around the time of the company’s IPO, we met with the management team and found them to be impressive, but the stock price at inception did not tempt us. This changed early in 2020, however, as investor sentiment toward internet platform companies waned (very temporarily). When we wrote our March quarterly report, we noted that “the current pandemic has less effect on Pinterest than many other companies, and it may even be seen to be a beneficiary of lockdowns.” We had no idea how prophetic that sentence would become as Pinterest proved to be a pandemic winner, eventually increasing in price more than seven times its March low.”

Our calculations show that Pinterest, Inc. (NYSE: PINS) ranks 27th in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Pinterest, Inc. was in 95 hedge fund portfolios, compared to 80 funds in the third quarter. PINS delivered a -2.77% return in the past 3 months.