Baron Opportunity Fund recently published its third-quarter commentary – a copy of which can be downloaded here. During the third quarter of 2020, the Baron Opportunity Fund returned 17.92% (institutional shares). In comparison, the benchmark S&P 500 Index was up 8.93%, while the Russell 3000 Growth Index was up 12.86%. 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 Q3 2020 Investor Letter, Baron Opportunity Fund highlighted a few stocks and Pinterest Inc. (NYSE:PINS) is one of them. Pinterest Inc. (NYSE:PINS) is a social networking service. Year-to-date, Pinterest Inc. (NYSE:PINS) stock gained 281.6% and on December 11th it had a closing price of $71.13. Here is what Baron Opportunity Fund said:
“Pinterest, Inc. is a visual-search platform where people discover and save ideas. Users come to Pinterest seeking inspiration for do-it-yourself projects, home improvements, party décor, and many other activities for which they might want to purchase novel products. These users often have high commercial intent and, as a result, are highly monetizable as they browse for visual inspiration. Given that consumers are just looking for image-based answers and don’t care as much whether a relevant image is an ad or not, Pinterest is one of the only social media platforms where, over time, ads can look like the content itself and not degrade from the user experience. We believe Pinterest’s monetization is inflecting as advertiser and merchant additions are dramatically accelerating, which in turn should lead to pricing gains for their ad inventory. Pinterest started to roll out sales coverage to major markets in Europe last year. More recently, the company partnered with Shopify to allow Shopify’s one million merchants to upload their product catalogs into the Pinterest ecosystem. We believe that this should yield an exciting unlock of supply, which enables a better shopping experience, drives more sales to these merchants, and soon thereafter, drives monetization improvements for Pinterest. Finally, the company has recently rolled out its latest advertising technology advancements, enabling advertisers to better target their ads on the platform and receive clearer insights into their return on ad spend. Over the next several quarters and years, we believe that Pinterest will monetize its users with much greater efficiency, leading to sustainably higher revenue growth.”
In Q3 2020, the number of bullish hedge fund positions on Pinterest Inc. (NYSE:PINS) stock increased by about 51% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Pinterest’s growth potential. Our calculations showed that Pinterest Inc. (NYSE:PINS) 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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Disclosure: None. This article is originally published at Insider Monkey.