Baron Opportunity Fund recently published its fourth-quarter commentary – a copy of which can be downloaded here. During the fourth quarter of 2020, the Baron Opportunity Fund returned 23.02% (institutional shares). In comparison, the benchmark S&P 500 Index was up 12.15%, while the Russell 3000 Growth Index was up 12.41%. You should check out Baron’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q4 2020 Investor Letter, the fund highlighted a few stocks and Stitch Fix Inc. (NASDAQ:SFIX) is one of them. Stitch Fix Inc. (NASDAQ:SFIX) is an online personal styling service in the United States. In the last three months, Stitch Fix Inc. (NASDAQ:SFIX) stock lost 24.4% and on March 18th it had a closing price of $52.48. Here is what the fund said:
“Stitch Fix, Inc. is an online personal styling service that uses recommendation algorithms and data science to personalize clothing items based on size, budget and style across all genders and ages. Previously a subscription-type business, Stitch Fix is starting to leverage its proprietary data to enable direct retail from its site. We believe this new offering expands Stitch Fix’s total addressable market to the broader $375 billion to $400 billion U.S. apparel market (along with international opportunities). To support its new product roadmap, Stitch Fix brought in President Elizabeth Spaulding (previously 20 years of experience at Bain) and CFO Dan Jedda (previously 15 years at Amazon). We came away from our meetings with management incredibly impressed by the strong bench and apparent firm culture of risk-taking and big ambition. We believe this is just the beginning of Stitch Fix’s successful pivot into traditional retail. Its proprietary data makes it one of the only retailers that can execute human-assisted AI by pairing more than 6 billion data points about specific customer preferences with over 5,000 stylists. As it gathers more data around direct buy, Stitch Fix can also optimize inventory to drive better conversion. Over time, management envisions Stitch Fix evolving into a dynamic marketplace with active vendor management, pricing/demand forecasting, and increased private label penetration (which is higher margin, with higher customer satisfaction scores and lower return rates). Looking further out, it can expand into new international markets or new categories, like furniture, decor, beauty, resale, and luxury. Over the next five years, we believe that sales can double from today’s level around $2 billion and that the stock offers significant upside potential.”
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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