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Why Fiat Chrysler Automobiles (FCAU) Stock is a Compelling Investment Case

Chou Associates Management recently released its Q2 2020 Investor Letter, a copy of which you can download here. In U.S. dollars, a Series A unit of Chou Associates Fund decreased by 32.3% in the first half of 2020 while the S&P 500 Total Return Index decreased by 3.1% in the same period. You should check out Chou Associates Management’s 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, Chou Associates Management highlighted a few stocks and Fiat Chrysler Automobiles N.V. (NYSE:FCAU) is one of them. Fiat Chrysler Automobiles N.V. (NYSE:FCAU) is an automobile company. Year-to-date, Fiat Chrysler Automobiles N.V. (NYSE:FCAU) stock lost 22.9% and on September 9th it had a closing price of $11.32. Here is what Chou Associates Management said:

“We initiated a position in FIAT back in late 2018 since it was a cheap stock with good amounts of cash. It caught our attention when the controlling shareholders wanted to unlock value either by paying special dividends, buybacks of shares or through strategic merger and acquisition. Since our purchase in December 2018, we have received US$2.70 in regular and special dividends, accounting for over 30% of the original price paid. We expect the regular and special dividend payments to continue once the COVID-19 crisis abates.”

2019 Chrysler 300C

2019 Chrysler 300C

In July, we published an article revealing that Fiat Chrysler Automobiles N.V. (NYSE:FCAU) was one of the best automobile stock in 2020, according to hedge funds.

In Q1 2020, the number of bullish hedge fund positions on Fiat Chrysler Automobiles N.V. (NYSE:FCAU) stock increased by about 9% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Fiat’s growth potential. Our calculations showed that Fiat Chrysler Automobiles N.V. (NYSE:FCAU) 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, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. 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 precious metals prices. So, we are checking out this junior gold mining stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. 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. 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.