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Why Alphabet (GOOG) Stock is a Compelling Investment Case

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Alex Smith
·3 min read
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Ensemble Capital recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 11.60% for the third quarter, outperforming its benchmark, the S&P 500 Index which returned 8.93% in the same quarter. You should check out Ensemble Fund's top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Ensemble Capital highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) is one of them. Alphabet Inc. (NASDAQ:GOOG) is a technology company. Year-to-date, Alphabet Inc. (NASDAQ:GOOG) stock gained 16.2% and on October 9th it had a closing price of $1,515.22. Here is what Ensemble Capital said:

"Google: After rallying by over 20% in July and August, Google’s share price pulled back sharply in September during the market wide correction. We believe that Google’s shares remain undervalued and that while the pandemic has hurt business performance in 2020, that the core value of Google Search, YouTube and their other properties such Google Maps has not been permanently impaired in any way and in fact the post-COVID world likely depends even more heavily on Google’s digital tools."

Best Selling Smartphones in the World 2015 Rankings
Best Selling Smartphones in the World 2015 Rankings

Last week, we published an article revealing that Portland Hill Asset Management is bullish on Alphabet Inc. (NASDAQ:GOOG) stock.

In Q2 2020, the number of bullish hedge fund positions on Alphabet Inc. (NASDAQ:GOOG) stock decreased by about 6% from the previous quarter (see the chart here), so a number of other hedge fund managers don't seem to agree with Alphabet's growth potential. Our calculations showed that Alphabet Inc. (NASDAQ:GOOG) is ranked #5 among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 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 are checking out this junior gold mining stock and 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 enewsletter below to receive our stories in your inbox:

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