U.S. markets close in 2 hours 8 minutes
  • S&P 500

    4,129.59
    -33.67 (-0.81%)
     
  • Dow 30

    33,777.84
    -299.79 (-0.88%)
     
  • Nasdaq

    13,762.33
    -152.44 (-1.10%)
     
  • Russell 2000

    2,177.45
    -54.55 (-2.44%)
     
  • Crude Oil

    62.55
    -0.83 (-1.31%)
     
  • Gold

    1,778.60
    +8.00 (+0.45%)
     
  • Silver

    25.83
    -0.01 (-0.03%)
     
  • EUR/USD

    1.2031
    -0.0010 (-0.08%)
     
  • 10-Yr Bond

    1.5570
    -0.0440 (-2.75%)
     
  • GBP/USD

    1.3936
    -0.0049 (-0.35%)
     
  • USD/JPY

    108.1340
    -0.0160 (-0.01%)
     
  • BTC-USD

    55,847.98
    +959.21 (+1.75%)
     
  • CMC Crypto 200

    1,270.02
    +35.61 (+2.88%)
     
  • FTSE 100

    6,859.87
    -140.21 (-2.00%)
     
  • Nikkei 225

    29,100.38
    -584.99 (-1.97%)
     

Here’s Why Davis International Fund Sold Ovintiv Inc. (OVV)

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Jose Karlo Mari Tottoc
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Davis Funds, an investment management firm, published its “Davis International Fund” fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 22.69% was recorded by the fund for the year end of 2020, outperforming its MSCI ACWI benchmark that delivered a 10.65% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Davis International Fund, in their Q4 2020 investor letter, mentioned Ovintiv Inc. (NYSE: OVV) and shared their insights on the company. Ovintiv Inc. is a Calgary, Canada-based natural gas company that currently has a $6.4 billion market capitalization. Since the beginning of the year, OVV delivered a 71.66% return, impressively extending its 12-month gains to 496.85%. As of April 06, 2021, the stock closed at $24.65 per share.

Here is what Davis International Fund has to say about Ovintiv Inc. in their Q4 2020 investor letter:

"Energy holdings in Ovintiv also experienced detracted performance, as oil demand collapsed due to the pandemic. With approximately 70% of oil demand used for transportation, the decline in miles driven (i.e., U.S. miles driven are down 11% in 2020) and the far bigger 60–70% decline in global air passenger traffic led to a dramatic drop in oil prices.

It is our expectation that oil demand will remain weak for the foreseeable future, as flying and driving slowly recover, and that over the long term, electric vehicles and renewable energy will also decrease demand for fossil fuels. As a result, we sold out of our energy positions in 2020. We redeployed the assets in other sectors such as financial services that also saw falling stock prices, but where we had stronger conviction that the long-term health of their business was strong."

Our calculations show that Ovintiv Inc. (NYSE: OVV) 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, Ovintiv Inc. was in 26 hedge fund portfolios, compared to 20 funds in the third quarter. OVV delivered a 42.65% 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.