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Why Floor & Decor (FND) Stock is a Compelling Investment Case

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Alex Smith
·3 min read
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Polen Capital Management recently released its Q3 2020 Investor Letter, a copy of which you can download here. During the third quarter of 2020, the Polen U.S. Small Company Growth Composite Portfolio returned 4.57% gross of fees, while the Russell 2000 Growth Index was up 7.17%. You should check out Polen Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Polen Capital highlighted a few stocks and Floor & Decor Holdings Inc. (NYSE:FND) is one of them. Floor & Decor Holdings Inc. (NYSE:FND) operates as a multi-channel specialty retailer of hard surface flooring and related accessories. Year-to-date, Floor & Decor Holdings Inc. (NYSE:FND) stock gained 49.5% and on November 12th it had a closing price of $75.96. Here is what Polen Capital said:

"Floor & Decor was our top contributor during the quarter. While the pandemic forced Floor & Decor to temporarily close stores or limit store traffic, customer demand has remained strong and sales growth has subsequently rebounded to pre-crisis levels as its stores fully re-opened.

The business has remained flexible and adapted to the current environment. It has pivoted to e-commerce and curbside pickup, more deeply engaged with customers digitally, and proactively worked with its top ‘Pro’ customers to ensure Floor & Decor meets their ongoing needs. Importantly, management has remained focused on all stakeholders throughout this period and we believe has taken many steps to further separate the company from competitors and drive long-term value. "

RomanR/Shutterstock.com

In Q2 2020, the number of bullish hedge fund positions on Floor & Decor Holdings Inc. (NYSE:FND) stock increased by about 91% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Floor & Decor's growth potential. Our calculations showed that Floor & Decor Holdings Inc. (NYSE:FND) isn't ranked 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 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.