Vulcan Value Partners, an investment management firm, published its “Large Cap, Small Cap, Focus Composite, Focus Plus Composite, and All Cap Composite” first quarter 2021 investor letter – a copy of which can be downloaded here. Vulcan’s Large Cap Composite Fund delivered a 7.1% net return for the first quarter of 2021, 20.4% for the Small Cap, 5.5% for both the Focus Composite and Focus Plus Composite Fund, and 8.7% return was delivered by its All Cap Composite Fund for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Vulcan Value Partners, in its Q1 2021 investor letter, mentioned SAP SE (NYSE: SAP), and shared their insights on the company. SAP SE is a Walldorf, Germany-based software company that currently has a $161.6 billion market capitalization. Since the beginning of the year, SAP delivered a 5.15% return, extending its 12-month gains to 18.00%. As of May 19, 2021, the stock closed at $137.10 per share.
Here is what Vulcan Value Partners has to say about SAP SE in its Q1 2021 investor letter:
“SAP SE is a global software provider known for its strength in enterprise resource planning (ERP) systems. The company’s installations are highly customized, deeply entrenched, and extremely difficult to replace. SAP is one of the largest companies in the world that provides a broad range of enterprise solutions through the Cloud and on-premise. Its committed customer base provides a runway for long-term growth and robust free cash flow production. SAP has begun the migration of its customer base to the Cloud. This transition will take time and depress its short-term revenue growth; however, the Cloud improves its long-term prospects and competitive positioning. We believe margins and revenue will increase as the company builds scale in the Cloud. The company lowered guidance for the next couple of years as they make the transition, the market reacted negatively, and the stock price declined. With a stable value and an attractive margin of safety, we are pleased to have an opportunity to own SAP in the portfolio.”
SFIO CRACHO/Shutterstock.com
Our calculations show that SAP SE (NYSE: SAP) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, SAP SE was in 14 hedge fund portfolios, compared to 16 funds in the third quarter. SAP delivered a 6.54% return in the past 3 months.
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.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:
Disclosure: None. This article is originally published at Insider Monkey.
