This fund’s “best of the best” portfolio is up 34% this year, crushing the S&P 500’s 6.9% return. And these 8 stocks have helped it outperform.
One of Fundstrat Global Advisors’ portfolios is majorly crushing the market this year.
The firm’s “Granny Shots” portfolio has returned more than 34% year-to-date, versus the S&P 500’s 6.9% return. The portfolio was named for NBA legend Rick Barry, who shot free throws in an underhanded “granny style” for a career percentage of around 90%.
Fundstrat founder Thomas Lee says the “Granny Shots” portfolio is “the best of the best” of their portfolios and includes stocks that have an attractive long-term thesis.
Still, the stocks in this basket can sometimes gain traction slowly, which means they require investors to have patience. But that patience pays off. Since the portfolio’s inception in January 2019, it has beaten the S&P 500 by 2,470 basis points.
Some familiar names in the portfolio include Apple (NASDAQ: AAPL), Google-parent Alphabet (NASDAQ: GOOGL, GOOG), and Microsoft (NASDAQ: MSFT).
But in addition to those big names, Fundstrat added five new stocks to the basket that look ready for a revival: semiconductor equipment maker KLA Corp (NASDAQ: KLAC), global media group Omnicom (NYSE: OMC), industrial WW Grainger (NYSE: GWW), and chipmakers Intel (NASDAQ: INTC) and Qualcomm (NASDAQ: QCOM).
According to Lee, Omnicom has suffered some big “headwinds” due to the coronavirus pandemic. The stock is down nearly 35% year-to-date as sales are expected to slump 17% as advertising is under pressure due to the coronavirus-induced global recession. But the stock has a P/E ratio of just 10 times estimated 2021 earnings, and shares trade at 0.9 times sales with ROE expected to be a robust 36% next year.
WW Grainger, meanwhile, is an industrial pick that plays well into the idea of an economic rebound. And that anticipated economic recovery has bolstered the stock, which is up around 14% so far this year.
Lee said Intel appears to be “shaking off its 2020 setbacks,” as it has risen nearly 15% since hitting bottom at the end of July.
One thing helping Intel right now is rising demand for PCs as workers continue to work from home and children shift to online learning amid the pandemic.
“The PC is just playing a more and more central role in our everyday lives, and whether it’s working from home or studying from home, or staying connected or playing games, the role of the PC as an essential device has never been more important,” said Intel CEO Bob Swan in an interview with Barron’s. “The PC market for silicon is roughly $100 billion for us, where the role of the PC is not just the CPU, but it’s more and more technology going into that computer.”
And as for Qualcomm, Lee says the stock looks like it is “waking up from a 20-year slumber.” The stock was stuck in a sideways trading range since 2000, but broke out above it in July of this year, indicating a new uptrend is beginning.
