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Cooper Investors Exits HDFC Bank (HDB) Position

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Jose Karlo Mari Tottoc
·3 min read
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Cooper Investors, an employee-owned investment company that manages 7 pooled investment trusts, published its Cooper Investors Global Equities Fund (Hedged) third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A positive return of 9.18% was recorded by the fund for the 3rd Quarter of 2020, ahead of its MSCI All Countries World benchmark that returned 6.94%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.

Cooper Investors in their Q3 2020 Investor Letter said that they were able to distinguish a value in HDFC Bank Limited (HDB) but initiated a sell in their position. HDFC Bank Limited is an Indian banking and financial services company that currently has a $110.521 billion market cap. For the past 3 months, HDB delivered a 33.71% return and settled at $74.88 per share at the closing of January 15th.

Here is what Cooper Investors has to say about HDFC Bank Limited in their Investor Letter:

"The risk-adjusted value proposition has evolved materially in a short period since the Fund invested in HDFC Bank during March, especially as the share price appreciated over 40%. We still believe it stands out as the best bank in India and will weather the storm significantly better than peers, however industry trends have worsened with India not yet at the inflection point of COVID-19 as observed in other Asian economies. Across the system we expect bad debts to rise significantly over the next 6-24 months and small businesses are under particularly high pressure. While disliking short holding periods these events represent a change in risk-adjusted value latency that drove a decision to exit the small position."

Money, Savings. Bancorp
Money, Savings. Bancorp

Copyright: agcreativelab / 123RF Stock Photo

Last December 2020, we published an article telling that HDFC Bank Limited (NYSE: HDB) was in 34 hedge funds’ portfolio. Its all time high statistics is 42. HDFC Bank Limited proved its worth by delivering a 21.28% return for the past 12 months.

Our calculations showed that HDFC Bank Limited (NYSE: HDB) does not belong to the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 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

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