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Cintas (CTAS) Will Emerge Stronger From the COVID-19 Crisis

Alex Smith

Aoris Investment Management recently released its Q1 2020 Investor Letter, a copy of which you can download below. The Aoris International Fund aims to generate returns of 8–12% p.a. over a market cycle. The portfolio is long-only and highly selective. You should check out Aoris Investment Management’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, Aoris Investment Management highlighted a few stocks and Cintas Corp (NASDAQ:CTAS) is one of them. Cintas is the leading supplier of rental uniforms in the United States. Year-to-date, Cintas Corp (NASDAQ:CTAS) stock lost 10.8% and on May 21st it had a closing price of $242.56. Here is what Aoris Investment Management said:

"Cintas Corporation is the largest uniform rental company in the United States, with customers drawn from manufacturing, hotels, casinos, restaurants, among other industries.

There is no doubt that while many of these customer sites are closed, Cintas’s revenue and earnings will be under severe pressure. Based on what we know today, we are comfortable holding Cintas, albeit at a reduced portfolio weight. The company has very long-tenured management, low employee attrition and a strong and well-defined culture that we believe will be a real asset during this testing period. The company is the leader in its market, not only for the whole of the United States but in almost every local geography, and has no areas of competitive weakness. This is a business where being the largest has significant advantages, and Cintas has outgrown its market on a consistent basis over the last decade. While we recognise the pressure the business will be under for a period of time, we expect Cintas to draw upon its strengths of size, culture and stable management, and emerge from the crisis stronger and with an enhanced market share."

Cintas Corporation (CTAS), NASDAQ:CTAS, Yahoo Finance,
Cintas Corporation (CTAS), NASDAQ:CTAS, Yahoo Finance,

In Q4 2019, the number of bullish hedge fund positions on Cintas Corp (NASDAQ:CTAS) stock increased by about 10% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with CTAS’s growth potential. Our calculations showed that Cintas Corp (NASDAQ:CTAS) isn’t 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 leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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