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Should Investors Buy the Dip in ADT (ADT) Stock?

Miller Value Partners recently released its Q2 2020 Investor Letter, a copy of which you can download here. The Opportunity Equity Fund posted a return of 47.02% for the quarter (net of fees), outperforming its benchmark, the S&P 500 Index which returned 20.54% in the same quarter. You should check out Miller Value Partners’ 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, Miller Value Partners highlighted a few stocks and ADT Inc. (NYSE:ADT) is one of them. ADT Inc. (NYSE:ADT) provides commercial security systems and services. Year-to-date, ADT Inc. (NYSE:ADT) stock gained 0.4% and on July 24th it had a closing price of $7.96. Here is what Miller Value Partners’ said:

“ADT Inc. (ADT) returned 85.5% over the period. The company reported 1Q revenue of $1.37B ahead of consensus of $1.23B with adjusted EBITDA of $539M ahead of consensus of $509M with Free Cash Flow (FCF) of $173M ahead of consensus of $139M. For the full year, the company reiterated their topline guidance (revenue of $5-5.3B) but lowered EBITDA guidance to $2.075-2.175B down from $2.175-2.25B with a wider FCF range of $600-700M from $630-670M. The company saw positive net new subscribers for the first time in 5 years.”


In Q1 2020, the number of bullish hedge fund positions on ADT Inc. (NYSE:ADT)  stock decreased by about 5% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with ADT’s growth potential. Our calculations showed that ADT Inc. (NYSE:ADT)  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. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so we are checking out this under-the-radar lithium stock. 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. 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.