Bares Capital’s Top 5 Stock Picks

1. Workday Inc (NASDAQ:WDAY)

Number of Hedge Fund Holders: 81
Bares Capital Management’s Equity Stake: $372.26 Million
2023 share price performance: 65%

Workday Inc (NASDAQ:WDAY) is Bares Capital Management’s top stock holding and operates as a cloud computing company. It offers enterprise cloud applications that help customers plan, execute, analyze, and extend to other applications and environments. Workday Inc (NASDAQ:WDAY) also provides financial management applications to maintain accounting information.

Workday Inc (NASDAQ:WDAY) was one of the best-performing stocks in Bares Capital Management’s portfolio as the stock saw a 65% gain last year.

“Workday remains a best-in-class HCM solution with a growing financial management business (FINS) which, in our view, is currently priced into the stock. As the business continues to make investments in its GTM motion and innovative product offerings, we don’t expect margins to expand materially in the intermediate term,” da Davidson wrote in a research note to investors.

As of the end of the fourth quarter of 2023, 81 out of the 933 hedge funds tracked by Insider Monkey held stakes in the company. Andreas Halvorsen’s Viking Global remains the most prominent holder, with stakes worth $1.13 billion.

Here is what Polen Global Growth Strategy said about Workday, Inc. (NASDAQ:WDAY) in its fourth quarter 2023 investor letter:

“Workday, Inc.’s (NASDAQ:WDAY) stock price was weak coming into the quarter. At the company’s investor day in late September, management provided medium-term annual revenue guidance of 17-19%. Many investors were likely expecting annual revenue guidance of 20%+, so the 17- 19% guidance may have been viewed as a tad disappointing. Following the investor day, Workday’s stock price rose significantly during Q4, buoyed by the company’s fiscal Q3 2024 earnings report, which was better than anticipated and included management raising revenue guidance for their fiscal 2024. We view the long-term guidance provided at the investor day as likely to be conservative, with ample room for Workday to continue taking share in the $100bn+ global HCM (human capital management) market. We remain confident in Workday’s ability to generate 20%+ annualized earnings growth over the next three to five years.”

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