Argosy Investors recently released its Q4 2020 Investor Letter, a copy of which you can download here. Full-year 2020 performance was 29.8% in select accounts. The S&P 500 by comparison returned 18.4%. You should check out Argosy Investors' top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q4 2020 Investor Letter, Argosy Investors' highlighted a few stocks and Pinterest Inc. (NYSE:PINS) is one of them. Pinterest Inc. (NYSE:PINS) is a social networking service. In the last three months, Pinterest Inc. (NYSE:PINS) stock gained 58.3% and on January 15th it had a closing price of $69.75. Here is what Argosy Investors' said:
"With that in mind, we trimmed Pinterest (PINS) multiple times during the fourth quarter as the price increased over 200% from our initial purchase price in November 2019. This was a starter position for us at the time, and this is one of those stocks that investors kept buying because of Pinterest’s perceived benefit from stay-at-home orders. We agree that the lockdowns likely forced people globally to try things they wouldn’t have normally. As the CEO of Post Holdings (POST), Rob Vitale, said on a recent conference call about customers trying cereal while stuck at home, “that level of trial would have been extremely expensive and challenging to obtain”. Similarly, we believe people tried and liked Pinterest at a rate that would be extremely expensive for them to acquire through advertising.
Pinterest has likely pulled forward some user growth to the present and perhaps expanded their addressable market. Older generations who might never have tried various applications learned how to do Zoom calls, buy on Amazon, and discover things they love on Pinterest because they had to.
All of that is positive for Pinterest. At the same time, we believe Pinterest is and may always be a relative minnow to other social media giants like Facebook, Instagram, WeChat in China, and others. It is far more likely that they reach a level of success more similar to Twitter than Facebook. The level of engagement is simply different. Facebook measures their engagement in billions of daily active users, while Pinterest measures their engagement in hundreds of millions of monthly active users. In any event, we created a starter position because we believed Pinterest was perhaps slightly undervalued given its prospects. We believe a 200% increase in roughly 12 months overly discounts their future success and the options they have to increase conversion on their platform."
Earlier this month, we published an article revealing that Carillon Eagle Mid Cap Growth Fund was bullish on Pinterest Inc. (NYSE:PINS) stock. The investment firm said that the company is benefiting from high engagement levels, new tools for conversion optimization, new shop-able ads, and international growth.
In Q3 2020, the number of bullish hedge fund positions on Pinterest Inc. (NYSE:PINS) stock increased by about 51% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Pinterest's growth potential. Our calculations showed that Pinterest Inc. (NYSE:PINS) isn't ranked among the 30 most popular stocks among hedge funds.