Why Charles & Colvard (CTHR) Stock is a Compelling Investment Case

Silver Ring Value Partners recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 6.9% for the last 12 months (net), underperforming its benchmark, the Russell 3000 Index which returned 15% in the same period. You should check out Silver Ring Value Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Silver Ring Value Partners highlighted a few stocks and Charles & Colvard Ltd (NASDAQ:CTHR) is one of them. Charles & Colvard Ltd (NASDAQ:CTHR) distributes and manufactures jewelry. Year-to-date, Charles & Colvard Ltd (NASDAQ:CTHR) stock lost 35.8% and on November 5th it had a closing price of $0.91. Here is what Silver Ring Value Partners said:

“The company has been handling the COVID pandemic relatively well, all things considered and the new CEO has taken some promising operational steps to move things in the right direction. With the downside protected by cash plus inventory and the upside substantial, I continue to view this investment as having a very attractive risk/reward ratio.

That is why I was unpleasantly surprised when management started talking about doing acquisitions on its most recent quarterly call and in its form 10-K. Dissipating our cash on uncertain ventures would substantially change the risk/reward profile of this investment, as well as have the potential to distract management at a crucial time for the company. This led me to file a form 13-D and write a letter to the Board articulating my views on the best way forward for optimizing longterm value. I am attaching the letter for your information.”

In April, we published an article revealing Silver Ring Value Partners bullish investment thesis on Charles & Colvard Ltd (NASDAQ:CTHR) stock in its Q1 2020 investor letter. This suggests that the investment firm has been bullish for a long time on Charles & Colvard Ltd (NASDAQ:CTHR).

Our calculations showed that Charles & Colvard Ltd (NASDAQ:CTHR) 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

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