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Junto Investments, a recently founded investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be seen here. A return of 38.26% was recorded by the fund for the year end 2020, outperforming both its S&P 500 benchmark that returned 18.79% and MSCI World Index with a 17.42% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Junto Investments, in their Q4 2020 Investor Letter said that they maintained their position in GrafTech International Ltd. (NYSE: EAF), and even if it was a laggard stock, they are still optimistic for the company. GrafTech International Ltd. is a graphite electrodes and petroleum coke manufacturing company that currently has a $2.7 billion market cap. For the past 3 months, EAF delivered a decent 52.14% return and settled at $10.30 per share at the closing of January 28th.
Here is what Junto Investments has to say about GrafTech International Ltd. in their investor letter:
"The laggard of the portfolio was GrafTech International, although it doesn’t seem all too bad looking at the return as displayed above. However, the price hit a low of $5.56 during the year, down 44% from our cost base. As the pandemic hit, steel production shrunk dramatically and so did the demand for GrafTech’s graphite electrodes. Some of the steel producers who had signed take-or-pay contracts with the company pressured renegotiations and some went bankrupt. The certainty behind GrafTech’s contracted cash flows for the next few years started wearing thin and that was reflected swiftly in the market price. Due to our small position and the company’s intact, strong competitive moat, we keep our ownership of the business as steel production ticks up and the trend towards environmentally friendly steel production continues."
Last September 2020, we published an article telling that GrafTech International Ltd. (NYSE: EAF) was in 24 hedge fund portfolios. Its all time high statistics is 33. EAF delivered a -7.12% return in the past 12 months.
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Video: Top 5 Stocks Among Hedge Funds
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Disclosure: None. This article is originally published at Insider Monkey.