Why Peloton Interactive (PTON) Stock is a Compelling Investment Case

GreenWood Investors recently released its Q2 2020 Investor Letter, a copy of which you can download here. Steven Wood, CFA founded Greenwood Investors, LLC in 2010. This year so far the fund has underperformed its benchmark the MSCI ACWI All Cap. You should check out GreenWood’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, GreenWood Investors highlighted a few stocks and Peloton Interactive Inc. (NASDAQ:PTON) is one of them. Peloton Interactive Inc. (NASDAQ:PTON) is an exercise equipment and media company. Year-to-date, Peloton Interactive Inc. (NASDAQ:PTON) stock gained 145.8% and on August 20th it had a closing price of $68.72. Here is what GreenWood Investors said:

“I briefly touched on Peloton in the last letter, our second largest position, and we have provided our initiation note on our public research page. Peloton is a clear winner from Covid-19, but with the near-term launch of a cheaper treadmill, after having conquered nearly 5% of the boutique fitness studio market in the United States, we think it’s poised to accelerate on the share gains. It has scale, network effects and the second highest customer satisfaction of any company in the world. Its business model behaves more like a luxury company than a fitness company. With over half of American exercisers now considering joining its ecosystem, the company will continue to compound meaningfully beyond Covid-19.”

In Q1 2020, the number of bullish hedge fund positions on Peloton Interactive Inc. (NASDAQ:PTON) stock increased by about 20% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Peloton’s upside potential. Our calculations showed that Peloton Interactive Inc. (NASDAQ:PTON) 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. 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.