Tidefall Capital Management LP, a concentrated, unconstrained investment fund, published its third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 25.40% was recorded by the fund for the 3rd Quarter of 2020, ahead of its S&P 500 benchmark that returned 8.9%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
Tidefall Capital Management in their Q3 2020 Investor Letter said that they were able to distinguish a value in Facebook, Inc. (NASDAQ: FB). Facebook, Inc. is a social networking service company that currently has a $715.9 billion market cap. For the past 3 months, FB delivered a -5.48% return and settled at $251.36 per share at the closing of January 15th.
Here is what Tidefall Capital Management has to say about Facebook, Inc. in their Investor Letter:
“Facebook is one of the best businesses in history. Its content is free, its distribution is free and its
value improves as more users join. Revenue is a function of ad rates which are derived from understanding its customer, a data point that increases over time due to improving algorithms.
There are very serious concerns with social media’s effect on society, and government regulation
needs to be updated but this is a solvable problem. In addition, competition will remain fierce but with
such a well developed ecosystem, new social media competitors are unlikely to be disruptive.
WhatsApp has billions of users, Facebook Groups has created inescapable micro-communities and
Instagram remains a vibrant network even after the ascent of TikTok. Facebook’s ability to move their
platforms into in-app commerce offers an exciting new vertical that is likely worth billions. Facebook is
trading at 19x 2022 consensus estimates (ex-cash), the same multiple as the S&P. “
Last November 2020, we published an article telling that Facebook, Inc. (NASDAQ: FB) was in 230 hedge funds’ portfolio, its all time high statistics. Facebook, Inc. delivered a -7.98% return YTD.
Our calculations showed that Facebook, Inc. (NASDAQ: FB) 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
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