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Is Monro (MNRO) a Smart Long-term Buy?

Alex Smith
·3 min read

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 Monro Inc. (NASDAQ:MNRO) is one of them. Monro Inc. (NASDAQ:MNRO) is an automotive repair and maintenance company. Year-to-date, Monro Inc. (NASDAQ:MNRO) stock lost 34.4% and on December 23rd it had a closing price of $51.30. Here is what Wasatch said:

"The largest detractor from Fund performance for the third quarter was Monro, Inc. (MNRO), a leading chain of automotive-repair shops with more than 1,280 locations spread across 32 states. The company has certainly been impacted in the short term by stay-at-home orders and decreased travel. Also, Monro’s CEO recently resigned to become the CEO of a larger company. Board Chairman Robert Mellor has been appointed interim CEO, and the search for a successor has been initiated. We spoke to Mr. Mellor recently and feel comfortable that a sound, long-term business plan remains in place for the company. Given an already-impressive footprint, we believe Monro still has significant headroom for growth over the next few years despite the company’s shortterm challenges."

Copyright: urfingus / 123RF Stock Photo

In Q3 2020, the number of bullish hedge fund positions on Monro Inc. (NASDAQ:MNRO) stock increased by about 27% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Monro's growth potential. Our calculations showed that Monro Inc. (NASDAQ:MNRO) 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.