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Is It Too Late to Buy LGI Homes (LGIH) Stock?

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Alex Smith
·3 min read
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Wasatch Small Cap Growth Fund recently released its Q4 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 29.7% for the quarter, in line with its benchmark, the Russell 2,000 Growth Index which returned 29.6% 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 Q4 2020 Investor Letter, the fund highlighted a few stocks and LGI Homes Inc. (NASDAQ:LGIH) is one of them. LGI Homes Inc. (NASDAQ:LGIH) is a construction company. In the last three months, LGI Homes Inc. (NASDAQ:LGIH) stock gained 44.5% and on April 1st it had a closing price of $153. Here is what the fund said:

"LGI Homes, Inc. (LGIH) was also a detractor. The company designs and builds homes in about 20 states. LGI has experienced impressive and consistent yearly growth since its 2013 initial public offering and now holds approximately 44,000 lots. LGI had a strong balance sheet coming into the pandemic, which we believe will allow the company to continue to take advantage of the opportunities presented by low mortgage interest rates and the surge in housing demand. For the fourth quarter, however, we think the stock simply took a breather from previously strong performance."

PI/Shutterstock.com

Our calculations showed that LGI Homes Inc. (NASDAQ:LGIH) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 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. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. 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.