Brown Capital Management, an investment management company, released its “The Brown Capital Management Mid Company Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The Mid Company Fund (Institutional shares) returned -7.85 % in the quarter significantly underperforming -3.21% return for the Russell Midcap Growth Index. The strategy focuses on EGCs with strong revenue growth, competitive advantages, and differentiated products that save time, and money or deliver significant value to consumers. In addition, check the fund’s top five holdings to know its best picks in 2024.
Brown Capital Management Mid Company Fund highlighted stocks like Guidewire Software, Inc. (NYSE:GWRE) in its Q2 2024 investor letter. Guidewire Software, Inc. (NYSE:GWRE) offers a platform for property and casualty (P&C) insurance companies. The one-month return of Guidewire Software, Inc. (NYSE:GWRE) was 10.25%, and its shares gained 71.77% of their value over the last 52 weeks. On September 6, 2024, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $161.72 per share with a market capitalization of $13.368 billion.
Brown Capital Management Mid Company Fund stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its Q2 2024 investor letter:
“Guidewire Software, Inc. (NYSE:GWRE) is a leading provider of software for Property & Casualty (P&C) insurance companies. Its software replaces legacy mainframe systems, helping to lower costs, improve decision making and enhance customer flexibility. Guidewire’s software covers the entire insurance lifecycle, from product selection to claims management, providing a system of record for clients. The company began a shift to cloud-based subscriptions seven years ago but has faced numerous obstacles along the way, some of which were self-inflicted. However, evidence of a turn emerged a year ago with the company becoming GAAP profitable for the first time in three years and cloud deals accelerating.
The momentum continued during the most recent quarter, with broad-based strength in sales and margins. Overall revenue rose 16% year over year, with growth in the subscription and support segment (60% of sales) accelerating to 28%, driven by strong cloud adoption. Margins also exceeded expectations, leading management to raise full-year guidance across the board, sending shares higher during the quarter. We believe Guidewire has reached an inflection point and expect ongoing cloud adoption to drive sales and margins higher in the coming years as insurance companies modernize their systems.”
An insurance adjuster reviewing images and paperwork to process a claim.
Guidewire Software, Inc. (NYSE:GWRE) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held Guidewire Software, Inc. (NYSE:GWRE) at the end of the second quarter which was 34 in the previous quarter. Guidewire Software, Inc. (NYSE:GWRE) reported $241 million in revenues, in the fiscal third quarter of 2024 and posted better-than-expected revenue growth in all areas. While we acknowledge the potential of Guidewire Software, Inc. (NYSE:GWRE) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Guidewire Software, Inc. (NYSE:GWRE) and shared Conestoga Capital Advisors’ views on the company. Baron Funds benefited from the upward movement of Guidewire Software, Inc. (NYSE:GWRE) in Q2 2024. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
