RiverPark Funds, an investment management company, released its “RiverPark Large Growth Fund” third quarter 2022 investor letter — a copy of which can be downloaded here. For the quarter, the RiverPark Large Growth Fund (the “Fund”) lost 3.3% – a bit better than the S&P 500 (-4.9% for the quarter) and about in line with the Russell 1000 Growth index (-3.6% for the quarter). Try to spare some time to check the fund’s top 5 holdings for you to have an idea about their best stock picks this 2022.
In its Q3 2022 investor letter, RiverPark Large Growth Fund mentioned Workday, Inc. (NYSE:WDAY) and explained its insights for the company. Founded in 2005, Workday, Inc. (NYSE:WDAY) is a Pleasanton, California-based system software company with a $39.9 billion market capitalization. Workday, Inc. (NYSE:WDAY) delivered a -42.83% return since the beginning of the year, while its 12-month returns are down by -44.77%. The stock closed at $156.18 per share on October 25, 2022.
Here is what RiverPark Large Growth Fund has to say about Workday, Inc. (NYSE:WDAY) in its Q3 2022 investor letter:
“We also added a small position in Workday this quarter, taking advantage of its 2022 price decline. WDAY is a leading SaaS software solutions provider with two key subparts: Workday HCM offering end-to-end software for human resource departments, and Workday Financial Management for planning, spending, auditing, analytics, and reporting. The company sells to more than 9,500 medium-sized through enterprise customers across more than 175 countries, including more than 50% of the Fortune 500.
The company is benefitting from the secular shift to digitization for businesses and despite its 21% annual subscription revenue CAGR over the past 2 years (with 95%+ gross revenue retention), Workday still has less than 5% penetration of its $105 billion TAM. We believe the company can grow its top-line high-teens over the long-term, while continuing to improve margins (non-GAAP gross operating margin expanded 900 basis points to 22.4% over the past two years), leading to approximately 30% EPS growth for the foreseeable future. The company also requires limited capital expenditures, producing significant and growing FCF ($1.4b last year, up 37% year over year), which WDAY has used for acquisitions and debt repayment.”
Our calculations show that Workday, Inc. (NYSE:WDAY)fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Workday, Inc. (NYSE:WDAY) was in 71 hedge fund portfolios at the end of the second quarter of 2022, compared to 87 funds in the previous quarter. Workday, Inc. (NYSE:WDAY) delivered a 10.84% return in the past 3 months.
In October 2022, we also shared another hedge fund’s views on Workday, Inc. (NYSE:WDAY) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q3 page.
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Disclosure: None. This article is originally published at Insider Monkey.
