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Is ViacomCBS (VIAC) A Smart Long-Term Buy?

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Ariel Investments, an investment management firm, published its “Ariel Fund”, “Ariel Appreciation Fund”, “Ariel Focus Fund”, “Ariel International Fund”, and “Ariel Global Fund” first-quarter 2021 investor letter – a copy of which can be downloaded here. A return of 19.50% was recorded by Ariel Fund for the first quarter of 2021, 15.65% by Ariel Appreciation Fund, 16.48% by Ariel Focus Fund, 0.14% by Ariel International Fund, and 3.47% by Ariel Global Fund for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Ariel Investments, in its Q1 2021 investor letter, mentioned ViacomCBS Inc. (NASDAQ: VIAC), and shared their insights on the company. ViacomCBS Inc. is a New York, New York-based mass media company that currently has a $27.5 billion market capitalization. Since the beginning of the year, VIAC delivered a 13.85% return, extending its 12-month returns to 104.53%. As of May 28, 2021, the stock closed at $42.42 per share.

Here is what Ariel Investments has to say about ViacomCBS Inc. in its Q1 2021 investor letter:

"Earlier in this letter, we noted that ViacomCBS, Inc. was the largest contributor to performance. And yet, over the last month, the company’s stock has fallen over 60% from its recent high. VIAC was at the center of the Archegos family office liquidation, with several Wall Street firms forced to sell large blocks of its shares at falling prices. Previously, VIAC shares were driven dramatically higher by the announcement of Paramount+ and a short-squeeze some commentators tied to the Reddit website. Chart 1 shows VIAC stock performance over this period, with black upwards arrows indicating our purchases, and blue downward arrows showing our sales. The gray area indicates the number of shares owned on any given date. In March of 2020, we increased our holding by 25% at prices below $20. By year-end, the stock had more than tripled to $36.90 from its 2020 low of $10.10 on March 16th. We trimmed our position modestly. VIAC remained our largest position at year-end. In January and February, the stock continued higher trading through $50, then $70 before reaching a high of $101.97 on March 15, 2021. We were aggressive sellers and sold 88% of our shares by quarter-end before the recent sell off in its shares."

Vice Media
Vice Media

Pixabay/Public Domain

Our calculations show that ViacomCBS Inc. (NASDAQ: VIAC) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, ViacomCBS Inc. was in 89 hedge fund portfolios, compared to 44 funds in the fourth quarter of 2020. VIAC delivered a -34.22% 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.

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Disclosure: None. This article is originally published at Insider Monkey.