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Weitz Partners: ‘First Republic is a Powerful Unit Growth’

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Jose Karlo Mari Tottoc
·3 min read
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Weitz Investment Management, a boutique employee-owned firm, published its ‘Weitz Partners Value Fund’ third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 7.14% was recorded by the fund for the Q3 of 2020, below both its S&P 500 benchmark that returned 8.93% and the Russell 3000 Index that returned 9.21%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.

Weitz Partners, in their Q3 2020 Investor Letter said that they acquired a new position in First Republic Bank (NYSE: FRC) because because they see a value and growth in the company. First Republic Bank is a bank and wealth management company that currently has a $26.5 billion market cap. For the past 3 months, FRC delivered a 20.90% return and settled at $155 per share at the closing of January 19th.

Here is what Weitz Partners has to say about First Republic Bank in their Investor Letter:

"We bought a new position in First Republic Bank in September. First Republic is a San Francisco-based, ultra-high-touch bank and wealth management company offering personal banking, business banking, trust, and wealth management services. First Republic develops raving fan clients through exceptional service, and the company acts more like a rarified luxury services organization than a commodity bank. Earnings growth is less a function of market interest rates (although higher rates certainly would not hurt) and credit cycles and more tied to the efficient acquisition of customers with high and growing lifetime values. In our view, First Republic is a powerful unit growth story with a long reinvestment runway."

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Last December 2020, we published an article telling that First Republic Bank (NYSE: FRC) was in 31 hedge fund portfolios. Its all time high statistics is 37. FRC delivered a 31.92% return in the past 12 months.

As of September 2020, Weitz Partners had a 91K share position in FRC that amounted to $9.9 million. However, our calculations showed that First Republic Bank (NYSE: FRC) does not belong to 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.