Oakmark Funds: “We Elected to Sell Parker-Hannifin (PH) to Pursue More Attractive Alternatives”

Oakmark Funds, an investment management firm, published its “Oakmark Fund” first quarter 2021 investor letter – a copy of which can be seen here. A return of 15.5% was reported by the fund in the Q1 of 2021, outperforming its S&P 500 benchmark that delivered a 6.2% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Oakmark Funds, in their Q1 2021 investor letter, mentioned Parker-Hannifin Corporation (NYSE: PH) and shared their insights on the company. Parker-Hannifin Corporation is a Cleveland, Ohio-based motion and control technologies corporation that currently has a $41.4 billion market capitalization. Since the beginning of the year, PH delivered a 17.90% return, extending its 12-month gains to 131.21%. As of April 12, 2021, the stock closed at $321.18 per share.

Here is what Oakmark Funds has to say about Parker-Hannifin Corporation in their Q1 2021 investor letter:

"Parker Hannifin approached our estimates of intrinsic value and were, therefore, eliminated during the period. The company was a longstanding investment of the Fund and produced successful outcomes. We believe Parker Hannifin, one of our longest tenured positions, is a high-quality, well-managed industrial with strong competitive positions in good end markets. However, after the market price reflected these positives, we elected to sell to pursue more attractive alternatives that were priced at steeper discounts to our estimates of intrinsic value."

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Our calculations show that Parker-Hannifin Corporation (NYSE: PH) 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, Parker-Hannifin Corporation was in 56 hedge fund portfolios, compared to 51 funds in the third quarter. PH delivered a 13.08% 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.

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