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 Tesla Inc. (NASDAQ:TSLA) is one of them. Tesla Inc. (NASDAQ:TSLA) is an electric car company. In the last three months, Tesla Inc. (NASDAQ:TSLA) stock gained 8.3% and on March 16th it had a closing price of $676.88. Here is what the fund said:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, and energy storage solutions. The stock increased on strong financial results, including profitability that exceeded market forecasts and strong growth across different geographies and vehicle programs. Indeed, in the third quarter, Tesla delivered almost 140,000 total vehicles – with strong unit level economics of 27.7% GAAP automotive gross profit margins – and another quarter of GAAP profitability and strong free cash flow (almost $1.4 billion). Recently, Tesla announced a record of over 180,000 total vehicle deliveries for the fourth quarter, effectively hitting its goal of 500,000 deliveries for the calendar year, a projection given before the COVID pandemic. In addition, we believe newly released full selfdriving functionality should yield further improvements in unit economics and open exciting new growth opportunities. Lastly, Tesla joined the S&P 500 Index, a meaningful milestone that significantly expands the potential shareholder base.”
In Q4 2020, the number of bullish hedge fund positions on Tesla Inc. (NASDAQ:TSLA) stock increased by about 1% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Tesla’s growth potential. Our calculations showed that Tesla Inc. (NASDAQ:TSLA) isn’t ranked among the 30 most popular stocks among hedge funds.
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.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. 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.