4. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 17
SAP SE (NYSE:SAP) is a German software company that develops software solutions used by both small and large corporations. With the help of the company’s software, different organizations of all sizes run their businesses profitably. SAP SE (NYSE:SAP) stands fourth on our list of the best German stocks to buy now.
In August, Oppenheimer assumed its coverage on SAP SE (NYSE:SAP) with an ‘Outperform’ rating and a $155 price target. The firm’s analyst, Ray McDonough sees the opportunity in the company’s services segment and expects the company to carry out multiple expansions in the segment. In Q2 2021, SAP SE (NYSE:SAP) posted an EPS of €1.75, beating the estimates by €0.58. The company also reported an 11% year-over-year growth in cloud revenue at €2.28 billion. SAP SE (NYSE:SAP) gained 17.15% in the past six months and 11.2% year to date.
With 8.8 million shares, worth $1.2 billion, Ken Fisher’s Fisher Asset Management is the company’s largest shareholder. As of Q2 2021, 17 hedge funds tracked by Insider Monkey have positions in SAP SE (NYSE:SAP), worth over $1.6 billion. In the first quarter, 19 hedge funds held stakes in the company, with a total value of $1.47 billion.
Polen Capital, an investment management firm, published its second-quarter 2021 investor letter and mentioned SAP SE (NYSE:SAP) in it. Here is what the firm has to say:
“During the second quarter, the leading absolute contributors to performance (includes) SAP. German enterprise software company SAP was a leading contributor to Portfolio returns in the quarter. Over the last six months, SAP rolled out a new simplified commercial offering aimed at making it easier for their customers to transition their core enterprise resource planning software to the cloud. “Rise with SAP” will encourage customers to consider moving certain workloads to new cloudenabled software. In many cases, SAP customers standardized business processes on SAP software over decades. Contemplating and enacting transformational change is a huge undertaking for these customers. Historically, transitioning to the cloud involves many third-party helpers, so having a single, trusted partner to lead the conversation, design the road map, and own the execution is helpful. Further, as customers shift to the cloud, more peripheral workloads can be handled by SAP, thereby potentially increasing the scale of its relationship with certain customers. Not all legacy customers will adopt SAP’s cloud software, but there could be meaningful performance benefits (quicker innovation, more agility, and mobility, etc.) and cost savings for those that do.
In addition, new customers are coming aboard the SAP cloud platform, which we view as a testament to its leading capabilities. This initiative could drive cloud software revenue growth greater than 20% in the coming years, some of which will cannibalize existing onpremise software sales. That said, the potential net result is attractive and durable growth. We think SAP is capable of doubledigit earnings growth over the coming five-year period.”
