Small businesses to invest in 2021

In this article, we’ve taken a look at the small businesses to invest in in 2021 according to billionaire Ken Fisher. If you want to skip our in-depth analysis of Fisher’s hedge fund history, investment philosophy and performance, go straight to the 5 small businesses to invest in 2021.

Ken Fisher, billionaire investor and founder of Fisher Asset Management, believes that value and relative smallness are intrinsically linked, saying that small-cap stocks generally offer higher value than large-cap stocks, and usually with wider margins. Investing in small cap stocks is one of the key elements of Fisher’s strategy, as these smaller companies tend to make bigger moves based on market reports and economic factors. It is true that large caps have a better potential for liquidity, but there is always a high chance that small caps will double in value compared to large caps. Ken Fisher’s $159 billion hedge fund held numerous positions in small-cap stocks in the first quarter of 2021 to take advantage of potential gains. Here’s what billionaire Ken Fisher said about small cap stocks in his latest article:

“Then, too, a simple truth, almost never stated, is that on a relative basis, value is always small cap. I don’t care about how you slice or slice the stock market, if you take the stocks that you consider to be the largest value stocks and compare them to the largest stocks that you think are not value stocks, you see that value stocks have smaller capitalizations – and usually by a lot I know some readers will say, “That’s not how I calculate value.” Maybe! But those same people would agree if asked how most investors calculate what a value is. Value stock vs. growth stock And they will agree if they look at the components of growth and value indices Value is tied to relative smallness And early liquidity in bear markets disproportionately dries up in them.”

Small cap stocks have shone over the past twelve months and have outperformed the broader equity index since the start of this year. The benchmark Russell 2000 small cap index is up more than 17% so far this year compared to the S&P 500 index’s growth of 14% and the NASDAQ index’s 11% rise at strong technological component.

The outperformance is not surprising. Small cap stocks are always very sensitive to market cycles and economic trends. The economic recovery and improved buying behaviors along with flexible financing policies supported the upward momentum in small company stock prices.

Jeff Buchbinder, equity strategist at LPL Financial, recently described a bullish outlook for small cap stocks:

“We believe the last recession is over and the new economic expansion has begun.” bad, and ultimately good.”

Fisher Asset Management believes in creating a well-diversified equity portfolio to capitalize on gains across asset classes of varying sizes. The company holds a position in large, mid and small caps. Fisher’s top 10 holdings in Q1 2021 include Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc Class A (NASDAQ:GOOGL). In addition, it has broadened its exposure to several sectors. At the end of the first quarter, Fisher Asset Management’s portfolio is more tilted towards the information technology sector, followed by financials, communications and consumer discretionary. According to the latest quarterly filings, Fisher Asset Management held a position in 933 stocks, with the top ten positions accounting for 30.66% of the overall portfolio.

Small businesses to invest in 2021

Ken Fisher of Fisher Asset Management

While Ken Fisher’s reputation remains intact, the same cannot be said for the hedge fund industry as a whole, as his reputation has been tarnished over the past decade, during which his hedged returns have not could not follow the unhedged returns of the equity indices. On the other hand, Insider Monkey research was able to pre-identify a select group of hedge funds that have outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021 , our monthly newsletter stock picks returned 197.2%, versus the SPY’s 72.4%. Our stock selections outperformed the market by more than 124 percentage points (see details here). We were also able to identify a select group of hedge fund holdings in advance that significantly underperformed the market. We have been following and sharing the list of these stocks since February 2017 and they have lost 13% until November 16. This is why we believe that hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can sign up for our free newsletter on our homepage to get our stories delivered to your inbox.

Let’s start digging into some of the best small businesses to invest in 2021 according to billionaire Ken Fisher. We used Fisher’s Q1 portfolio for this analysis.

Small businesses to invest in 2021

10. Beacon Roofing Supply, Inc. (NASDAQ: BECN)

Number of hedge fund holders: 21

At the end of the first quarter, billionaire Ken Fisher held a $77.59 million stake in Beacon Roofing Supply, Inc. (NASDAQ: BECN), representing 0.05% of the overall portfolio. The company first initiated a position in Beacon Roofing Supply, Inc. (NASDAQ: BECN) in 2012. Shares of Beacon Roofing Supply, Inc. (NASDAQ: BECN) have jumped 32% since the start of this year, extending year-over-year gains to 95%. The company is engaged in the distribution of residential and non-residential roofing materials and complementary building products.

Such as Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc Class A (NASDAQ: GOOGL), Beacon Roofing Supply, Inc. (NASDAQ: BECN) is one of the best stocks to buy based on Ken Fisher’s Q1 portfolio.

The number of long positions in hedge funds was 21, compared to 23 in the previous quarter.

9. Artisan Partners Asset Management Inc. (New York Stock Exchange: APAM)

Number of hedge fund holders: 21

With a market cap of $3.84 billion, Artisan Partners Asset Management Inc. (NYSE: APAM) emerges as one of the best small companies to invest in 2021. This is due to its consistent upside potential in the stock price. stock as well as a high dividend yield of 6.70. %. At the end of the first quarter, Fisher Asset Management held a $78 million position in Artisan Partners Asset Management Inc. (NYSE: APAM), representing 0.06% of the total portfolio.

At the end of the first quarter, the number of positions in hedge funds remained stable in Artisan Partners Asset Management Inc. (NYSE: APAM) compared to the previous quarter. These were 21 hedge fund portfolios at the end of March.

Such as Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc Class A (NASDAQ: GOOGL), Artisan Partners Asset Management Inc. (NYSE: APAM) is one of the best stocks to buy based on Ken Fisher’s Q1 portfolio.

8. Stamps.com Inc. (NASDAQ: STMP)

Number of hedge fund holders: 32

Internet mail and shipping solutions company Stamps.com Inc. (NASDAQ: STMP) has been part of Ken Fisher’s portfolio since 2015. At the end of the first quarter, Stamps was 0.08% of Fisher Asset’s portfolio Management. Stamps.com Inc. (NASDAQ: STMP) has underperformed over the past year. However, it could turn out to be a great buying opportunity for new investors.

Stamps.com was in 32 hedge fund portfolios at the end of Q1 2021, up from 38 positions in the previous quarter.

As Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc Class A (NASDAQ: GOOGL), Stamps.com Inc. (NASDAQ: STMP) is one of the best stocks to buy based on Ken Fisher’s Q1 portfolio.

7. Corporation of Meritage Homes (NYSE: MTH)

Number of hedge fund holders: 23

Residential construction company Meritage Homes Corporation (NYSE: MTH) is on the list of small businesses to invest in 2021, according to Ken Fisher. At the end of the first quarter, Fisher Asset Management held a stake of $118 million, or 0.08% of the overall portfolio. Meritage Homes Corporation (NYSE: MTH) has climbed 15% so far this year, accelerating year-over-year gains to 28%. The Company operates through two segments, residential construction and financial services.

Meritage Homes Corp was in 23 hedge fund portfolios at the end of March, down from 33 positions in the prior quarter.

Like Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc Class A (NASDAQ: GOOGL), Meritage Homes Corporation (NYSE: MTH) is the one of the best stocks to buy based on Ken Fisher’s Q1 portfolio.

6.Terex Corporation (NYSE:TEX)

Number of hedge fund holders: 31

Terex Corporation (NYSE: TEX), a global manufacturer and seller of aerial work platforms and materials processing machinery, has been a member of the Fisher Asset Management portfolio since 2013. Terex Corporation (NYSE: TEX) represented 0.08% of the hedge fund of Ken Fisher portfolio at the end of the March quarter. In fact, the company benefited from its position in Terex Corporation (NYSE: TEX). Indeed, shares of Terex Corporation have jumped 114% in the last twelve months. Additionally, the company offers a dividend yield of 1.12%.

Fund managers were becoming more optimistic. The number of bullish positions in hedge funds has increased by 8 lately. Terex Corporation (NYSE:TEX) was in 31 hedge fund portfolios at the end of the first quarter of 2021, up from 23 positions in the previous quarter. The all-time high for this stat is 38.

Like Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc Class A (NASDAQ: GOOGL), Terex Corporation (NYSE: TEX) is one of the best stocks to buy based on Ken Fisher’s Q1 portfolio.

Click to continue reading and see the 5 small businesses to invest in 2021.

Suggested items:

Disclosure: none. Small businesses to invest in 2021 is originally published on Insider Monkey.

Comments are closed.