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Here’s Why Wedgewood Partners Remain Invested in CDW Corp. (CDW)

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Jose Karlo Mari Tottoc
·3 min read
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Wedgewood Partners, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A return of +4.8% was reported by the fund for the Q1 of 2021, outperforming its Russell 1000 Growth benchmark that delivered a 1% return, but below both the S&P 500 and Russell 1000 Value Index that had a 6.2% and 11.3% gains in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Wedgewood Partners, in their Q1 2021 investor letter, mentioned CDW Corporation (NASDAQ: CDW) and shared their insights on the company. CDW Corporation is a Vernon Hills, Illinois-based information technology products and services provider that currently has a $25 billion market capitalization. Since the beginning of the year, CDW delivered a 35.23% return, extending its 12-month gains to 71.89%. As of April 13, 2021, the stock closed at $175.89 per share.

Here is what Wedgewood Partners has to say about CDW Corporation in their Q1 2021 investor letter:

"CDW returned to double-digit revenue (+10.7%) along with terrific earnings growth (+28.4%) as customers, particularly in the education and government verticals, get caught up from delayed IT spending as COVID-19 interruptions subsided in the December quarter. CDW finished the year with positive top-line growth and managed to expand margins as the Company was a critical supplier of “work-from-home” IT hardware and software solutions to small- and medium- sized businesses. The Company tends to outgrow IT spending budgets given they consistently take share from smaller distributors, while software and hardware vendors rely on CDW to generate bookings in the fragmented SMB customer channel. CDW’s tech-enabling value proposition should continue to drive reliable double-digit earnings growth, meanwhile the stock has an undemanding multiple which is why we continue to hold it as overweight in the portfolio."


Our calculations show that CDW Corporation (NASDAQ: CDW) 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, CDW Corporation was in 43 hedge fund portfolios, compared to 30 funds in the third quarter. CDW delivered a 31.89% 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.