Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Zillow (Z) Plans to Do to Real Estate What Amazon (AMZN) Did to Retailing

Touchstone Sands Capital Institutional Growth Fund recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -9.45% for the quarter, outperforming its benchmark, the Russell 1000 Growth Index which returned -14.10% in the same quarter. You should check out Touchstone Sands Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.

In the said letter, Touchstone Sands Capital highlighted a few stocks and Zillow Inc (NASDAQ:Z) is one of them. Zillow is an online real estate database company. Year-to-date, Z stock gained 4.1% and on May 14th it had a closing price of $47.46. Its market cap is of $10.3 billion. Here is what Touchstone Sands Capital said:

“Zillow is a leading digital-services provider for the real-estate industry. We believe the company will leverage its brand, industry experience, and new Offers business to digitize the entirety of the home buying and selling process, move closer to the transaction, and take a greater share of each home purchase that it facilitates. With a solid base in its legacy business (serving home-buyer leads to realestate agents), Zillow has launched a new business, Zillow Offers, which purchases homes directly from sellers. While this is seemingly a low-margin, capital-intensive business, the reality is that Offers enables Zillow to enter multiple high-margin business lines including mortgage origination, title and escrow services and, we believe, a seller-leads business to complement the existing buyer-leads business. Over the long term, we envision Zillow evolving from a site that provides home-value data to one where consumers can shop for agents, related services, and even buy and sell homes directly: a true digital real-estate marketplace, similar to other ecommerce platforms.”

As you can see Touchstone Sands Capital believes that Zillow plans to do to real estate what Inc. (NASDAQ:AMZN) did to retailing. In Q4 2019, the number of bullish hedge fund positions on Z stock decreased by about 12% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Z’s growth potential.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.