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U.S. Bancorp (USB), an Attractive Detractor?

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Jose Karlo Mari Tottoc
·3 min read
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Mairs & Power, an investment management firm, published its fourth-quarter 2020 ‘Growth Fund’ Investor Letter – a copy of which can be downloaded here. A return of 13.88% was recorded by the fund in the fourth quarter of 2020, outperforming its S&P 500 TR benchmark that delivered a 12.15% return, but below the Lipper Multi Cap Core Funds index that posted gains of 15.69% in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.op 5 holdings to have a peek at their top bets for 2021.

Mairs & Power, in their Q4 2020 investor letter, mentioned U.S. Bancorp (NYSE: USB) and emphasized their views on the company. U.S. Bancorp is a Minnesota-based bank holding company. It currently has an $80.8 billion market capitalization. Since the beginning of the year, USB delivered a 15.50% return, extending its 12-month gains to 48.61%. As of March 9, 2021, the stock closed at $52.90 per share.

Here is what Mairs & Power has to say about U.S. Bancorp in their Q4 2020 investor letter:

"On the negative side, one of the Fund’s biggest detractor in 2020 was U.S. Bancorp (USB). Like all banks, U.S. Bank was hurt by the difficult interest rate environment and credit cycle concerns. We believe banks are strong enough to survive the current sector doldrums, and they remain some of the market’s most attractive opportunities."

Creative Lab/Shutterstock.com

Our calculations show that U.S. Bancorp (NYSE: USB) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, U.S. Bancorp was in 60 hedge fund portfolios, compared to 48 funds in the third quarter. USB delivered a 20.71% return in the past 3 months.

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.