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Zebra Technologies (ZBRA) Boosted Ariel Investment’s Growth

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Jose Karlo Mari Tottoc
·3 min read
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Ariel Investments, a minority-owned investment company that focuses in small and mid-capitalized US based stocks, published its third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A positive return of 4.56% was recorded by the fund for the 3rd Quarter of 2020, ahead of its Russell 2500 Value benchmark that returned 3.54%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.

Ariel Investments in their Q3 2020 Investor Letter said that they were able to distinguish a value in Zebra Technologies Corporation (NASDAQ: ZBRA) and was a strong performer for the hedge fund. Zebra Technologies Corporation is a company that manufactures and sells computer printing technologies and other related materials, that currently has a $21.965 billion market cap. For the past 3 months, ZBRA delivered a huge 43.39% return and settled at $411.98 per share at the closing of January 14th.

Here is what Ariel Investments has to say about Zebra Technologies Corporation in their Investor Letter:

"Bar code manufacturer, Zebra Technologies Corporation (NASDAQ: ZBRA) was another strong performer in the period. Although global supply chain disruptions and weaker demand in China resulted in the company pulling its full year guidance, ZBRA has been delivering revenue and earnings above Wall Street expectations throughout the pandemic. Meanwhile ZBRA is entering the new fiscal year with a solid backlog, driven by orders from larger customers, which include the United States Postal Service. Looking ahead, we believe the company’s diversified end-markets, strong financial position and solid balance sheet will enable ZBRA to continue to weather pandemic related weakness in the enterprise spending environment."

Last December 2020, we published an article telling that Zebra Technologies Corporation (NASDAQ: ZBRA) was in 44 hedge funds’ portfolio, its all time high statistics. Zebra Technologies Corporation proved its worth by delivering a 62.24% return for the past 12 months.

As of September 2020, Ariel Investments had a 234K share position in ZBRA that amounted to $59 million. This made Ariel Investments as the top 3 hedge fund that holds most of ZBRA’s stake, just behind Goodnow Investment Group with $75 million worth of ZBRA shares, and Cedar Rock Capital with $326.7 million. However, our calculations showed that Zebra Technologies Corporation (NASDAQ: ZBRA) 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.