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Is Floor & Decor Holdings (FND) a Smart Long-term Buy?

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Alex Smith
·3 min read
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Wasatch Core Growth Fund recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 6.61% for the quarter, outperforming its benchmark, the Russell 2000 Index which returned 4.93% in the same quarter. You should check out Wasatch's top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Wasatch highlighted a few stocks and Floor & Decor Holdings Inc. (NYSE:FND) is one of them. Floor & Decor Holdings Inc. (NYSE:FND) is a speciality retail company. Year-to-date, Floor & Decor Holdings Inc. (NYSE:FND) stock gained 98.4% and on December 22nd it had a closing price of $100.78. Here is what Wasatch said:

"Falling mortgage interest rates have led to tailwinds in some industries. For example, there’s been a spike in U.S. home sales and new-home construction. These trends have been benefiting several of our holdings, including Floor & Decor Holdings, Inc. (FND). The company sells tile, wood, laminate and natural-stone flooring—as well as related decorations and accessories. We think the number of stores may increase by about 20% in 2021 and upcoming same-store sales growth could exceed analysts’ expectations. Floor & Decor was among the top contributors to Fund performance for the quarter."

topnatthapon/Shutterstock.com

Last month, we published an article revealing that Polen Capital Management is bullish on Floor & Decor Holdings Inc. (NYSE:FND) stock. The investment firm said that the company's sales growth has rebounded to pre-COVID levels as its stores fully reopened.

In Q3 2020, the number of bullish hedge fund positions on Floor & Decor Holdings Inc. (NYSE:FND) stock decreased by about 5% from the previous quarter (see the chart here), so a number of other hedge fund managers don't believe in FND's growth potential. Our calculations showed that Floor & Decor Holdings Inc. (NYSE:FND) isn't ranked among 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

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 daily newsletter on our website:

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