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Lookback: Wedgewood Partners 2019 Facebook (FB) Thesis

Alex Smith
·3 min read

If you are looking for the best ideas for your portfolio you may want to consider some of Wedgewood Partners top stock picks. Wedgewood Partners, an investment management firm, is bullish on Facebook Inc (NASDAQ:FB) stock. In its Q3 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Facebook Inc (NASDAQ:FB) stock. Facebook Inc (NASDAQ:FB) is a social media company.

In October 2019, Wedgewood Partners had released its Q3 2019 investor letter. The investment firm said that Facebook Inc (NASDAQ:FB) was one of the biggest detractors to its performance in Q3 2019. The stock has posted a return of 35.7% in the trailing one year period, outperforming the S&P 500 Index which returned 14.4% in the same period. This suggests that the investment firm was right in its decision.

Last month, we published an article revealing Wedgewood Partners bullish investment thesis on Facebook Inc (NASDAQ:FB) stock in its Q3 2020 investor letter. This suggests that the investment firm has been bullish for a long time on Facebook Inc (NASDAQ:FB).

Wedgewood Partners fund posted a return of 0.39% in the third quarter of 2019, underperforming the S&P 500 Index which returned 1.87% in the same quarter. Let’s take a look at comments made by Wedgewood Partners about Facebook Inc (NASDAQ:FB) in the Q3 2019 investor letter.

"Facebook reported 32% growth in constant currency ad revenue, along with expectations for 50-55% growth in expenses as the Company continued with their telegraphed plan to accelerate investments in privacy and security across their social platforms. The Federal Trade Commission (FTC) also approved a $5 billion fine for violating a 2012 FTC order by misrepresenting users’ ability to control data privacy. While this removed an overhang dating back to early 2018, continued pressure from politicians and regulators kept Facebook’s earnings multiple in check."

Best Facebook Pages to Follow in 2018
Best Facebook Pages to Follow in 2018

Twin Design / Shutterstock.com

In Q2 2020, the number of bullish hedge fund positions on Facebook Inc (NASDAQ:FB) stock decreased by about 1% from the previous quarter (see the chart here), so a number of other hedge fund managers don't believe in Facebook's growth potential. Our calculations showed that Facebook Inc (NASDAQ:FB) is ranked #3 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 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. Tesla's stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. 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.