Ariel Investments, an investment management firm, published its “Ariel Fund”, “Ariel Appreciation Fund”, “Ariel Focus Fund”, “Ariel International Fund”, and “Ariel Global Fund” second-quarter 2021 investor letter – a copy of which can be downloaded here. A return of 5.52% was recorded by Ariel Fund for the second quarter of 2021, 4.8% by Ariel Appreciation Fund, 4.0% by Ariel Focus Fund, 5.3% by Ariel International Fund, and 6.2% by Ariel Global Fund for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
In the Q2 2021 Investor Letter, the fund highlighted a few stocks and Oracle Corp (NYSE:ORCL) is one of them. Oracle Corp (NYSE:ORCL) is a computer software company. In the last three months, Oracle Corp (NYSE:ORCL) stock gained 15%. Here is what the fund said:
“Oracle Corp. (ORCL) is our largest holding and was our third largest contributor in the quarter, increasing +11.41%. Oracle changed its revenue accounting several years ago moving to an annual licensing fee for most of its software products. This smoothed the company’s earnings over time but did have the effect of reducing near-term revenue growth and lowering its P/E multiple. In our opinion, Oracle has never gotten the respect it deserves as a $40 billion cloud computing and software company. It has consistently traded at multiples well below that of cloud/ software competitors such as Microsoft. We track sell-side ratings as a gauge of whether a stock is in or out of favor. Oracle currently has an average rating of 1.89, meaning there are far fewer buy recommendations than hold ratings. In our opinion, the analyst community hostility to Oracle’s founder, Larry Ellison, has been a consistent headwind to the stock’s valuation.”
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Earlier this month, we published an article revealing that Oracle Corp (NYSE:ORCL) was one of the 10 cloud software stocks with strong growth potential.
In Q1 2021, the number of bullish hedge fund positions on Oracle Corp (NYSE:ORCL) stock remained unchanged from the previous quarter (see the chart here). Our calculations showed that Oracle Corp (NYSE:ORCL) isn’t ranked among the 30 most popular stocks among hedge funds.
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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Disclosure: None. This article is originally published at Insider Monkey.
