Vulcan Value Partners, an exclusive investment vehicle for all public equity investments, published its ‘Large Cap Composite’ third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A gross return of 7% was recorded by the fund for the Q3 of 2020, above its Russel 1000 Value Index benchmark that returned 6.8% but below S&P 500 that returned 8.9%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
Vulcan Value Partners, in their Q3 2020 Investor Letter said that the management of CoStar Group, Inc. (NASDAQ: CSGP) continues to create value and so they acquired a position in this company. CoStar Group, Inc. is a commercial property company that currently has a $33.6 billion market cap. For the past 3 months, CoStar Group, Inc. delivered a 2.12% return and settled at $853.72 per share at the closing of January 15th.
Here is what Vulcan Value Partners has to say about CoStar Group, Inc. in their Investor Letter:
“We purchased one new position, CoStar Group Inc., is the dominant provider of information services in the real estate industry providing data, analytics, and online marketplaces. Approximately half of CoStar’s revenue is derived from CoStar Suite, a subscription-based service that provides a wide variety of data such as property information, lease terms, comps, tenant information, and valuations. CoStar’s competitive moat is the historical and ongoing data it collects. It has over 200,000 clients who depend on CoStar for their workflows. The other half of its revenue is derived from its marketplace segment. Approximately two thirds of the segment are marketplaces for multifamily properties such as Apartments.com which charges a fee to list available apartments. This site has eleven times more traffic than its closest competitor. The other third is from LoopNet which is its platform for leasing and selling commercial real estate and is comparable to the MLS of commercial real estate. LoopNet is modernizing commercial real estate listings, moving from broker-to-broker relationships to online access, and has a direct competitive advantage as it can leverage the data from CoStar Suite. Management continues to create value through acquisitions and, given that real estate is the largest asset class in the U.S., we believe that potential growth for CoStar is tremendous.”
Last December 2020, we published an article telling that CoStar Group, Inc. (NASDAQ: CSGP) was in 55 hedge funds’ portfolio, its all time high statistics. CSGP delivered a 31.42% return in the past 12 months.
As of September 2020, Vulcan Value Partners had a 458k share position in CSGP that amounted to $388 million. However, our calculations showed that CoStar Group, Inc. (NASDAQ: CSGP) does not belong to 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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