Why Bed Bath & Beyond (BBBY) Stock is a Compelling Investment Case

Miller Value Partners recently released its Q2 2020 Investor Letter, a copy of which you can download here. During the second quarter, Deep Value Strategy led the overall marketplace and S&P 1500 Value index, generating returns in excess of 50%. You should check out Miller Value Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Miller Value highlighted a few stocks and Bed Bath & Beyond Inc (NASDAQ:BBBY) is one of them. Bed Bath & Beyond Inc (NASDAQ:BBBY) is a retail-store company. Year-to-date, Bed Bath & Beyond Inc (NASDAQ:BBBY) stock lost 28.1% and on August 13th it had a closing price of $12.34. Here is what Miller Value said:

“Bed Bath & Beyond (BBBY), one of our largest detractors in the first quarter ended up being our largest contributor during the second quarter, as the share price was up in excess of 100%. While the company has had its challenges over the past couple of years, we disagree with the consensus view that these challenges will continue into the future. We expect that as new initiatives roll out over the coming quarters as the turnaround continues, we will see significant improvement in future operating trends. We like the new CEO’s recent additions to his management team; these are strong executives with significant transformation experience. Bed Bath continues to have a very strong balance sheet (greater than $10/share in cash), has additional non-core assets that will likely be monetized, and is making significant progress in enhancing their store operations. We believe management’s new Omni-channel offerings, significant cost reductions, and new private label offerings should stabilize operations and lead the company to significantly higher normalized earnings and free cash flow over the coming years.”

bed, beyond, bath, retail, outlet, retailer, store, mall, new, property, suburb, crossing, storefront, consumer, shop,brand

kevin brine / Shutterstock.com

In Q1 2020, the number of bullish hedge fund positions on Bed Bath & Beyond Inc (NASDAQ:BBBY) stock decreased by about 18% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with BBBY’s growth potential. Our calculations showed that Bed Bath & Beyond Inc (NASDAQ:BBBY) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 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

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in America to pick the best large-cap stocks to buy. 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.