Why Discovery (DISCA) Stock is a Compelling Investment Case

Andaz Private Investments recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 14.6% in the first nine months of 2020, outperforming the S&P 500 Index which returned 6.5% in the same period. You should check out Andaz Private Investments top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Andaz Private Investments highlighted a few stocks and Discovery Inc. (NASDAQ:DISCA) is one of them. Discovery Inc. (NASDAQ:DISCA) is a multinational mass media company. Year-to-date, Discovery Inc. (NASDAQ:DISCA) stock lost 30.9% and on October 7th it had a closing price of $22.19. Here is what Andaz Private Investments said:

“Discovery is extremely undervalued and on a c.30% free cash flow yield. The company also believes their stock is extremely undervalued and is allocating half of that free cash into share buybacks. At a recent conference, they informed the market that they have successfully and significantly increased pricing in their recent Upfront (gathering of TV networks and advertisers). This will most likely result in greater profits and cash flow over the medium term. Discovery continues to gain share in the USA and Internationally.”

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In Q2 2020, the number of bullish hedge fund positions on Discovery Inc. (NASDAQ:DISCA) stock decreased by about 9% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Discovery’s growth potential. Our calculations showed that Discovery Inc. (NASDAQ:DISCA) 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. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers after its stock price crashed. We go through lists like the 10 most profitable companies in the world 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. 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.