Why LKQ Corp (LKQ) Stock is a Compelling Investment Case

Bonsai Partners recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 63.3% for the quarter (net of fees), outperforming their benchmark, the S&P 500 Index which returned 8.9% in the same quarter. You should check out Bonsai Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Bonsai Partners highlighted a few stocks and LKQ Corp (NASDAQ:LKQ) is one of them. LKQ Corp (NASDAQ:LKQ) is the largest supplier of used auto parts in the United States. Year-to-date, LKQ Corp (NASDAQ:LKQ) stock lost 9.1% and on October 22nd it had a closing price of $32.23. Here is what Bonsai Partners said:

“LKQ is the largest provider of alternative collision and mechanical automotive parts in the United States. In Europe, they are the leading distributor of general automotive maintenance parts and supplies.

LKQ shares appreciated approximately 6% during the quarter.

During the quarter, LKQ hosted a virtual analyst day where they laid out their current set of initiatives and goals. I believe the company is focused on the right set of activities to improve its efficiency and reach its operational targets in the medium term.”

In Q2 2020, the number of bullish hedge fund positions on LKQ Corp (NASDAQ:LKQ) stock increased by about 7% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in LKQ’s growth potential. Our calculations showed that LKQ Corp (NASDAQ:LKQ) 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. 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.