Brown Capital Management International Equity Fund recently released its Q4 2020 Investor Letter, a copy of which you can download here. In the fourth quarter of 2020, the indexes that represent international equities rose: the MSCI ACWI ex USA Index increased 17.08%; the MSCI World ex USA Index went up 15.91%; and the MSCI EAFE Index returned 16.09%. The Brown Capital Management International Equity Fund lagged these returns. However, you should check out Brown Capital Management’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q4 2020 Investor Letter, the fund highlighted a few stocks and SAP SE (NYSE:SAP) is one of them. SAP SE (NYSE:SAP) is a software company. In the last three months, SAP SE (NYSE:SAP) stock gained 2.7% and on February 26th it had a closing price of $123.35. Here is what the fund said:
“SAP, headquartered in Germany, is one of the largest software companies in the world. It is the global leader in enterprise resource planning (ERP), supply chain management and procurement software. In the quarter, SAP management updated its long-term projections and now expects a faster shift to cloud services, as well as a delay in implementations due to the impact of COVID-19. The news had a negative impact on the stock price. We believe the transition to the cloud is positive for SAP in the long run, as the lifetime revenues and profitability for cloud products are higher, although this is offset by lower recognized revenue in the short term. This dynamic contrasts with SAP’s legacy business which typically sells software licenses, providing a large up-front payment but lower recurring fees. Positively, there are benefits of scale in the cloud business, and as SAP grows its client base, we think margins should improve rapidly.”
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Last week, we published an article revealing that SAP SE (NYSE:SAP) was one of the top 15 most valuable cloud computing companies.
In Q3 2020, the number of bullish hedge fund positions on SAP SE (NYSE:SAP) stock remained unchanged from the previous quarter (see the chart here). Our calculations showed that SAP SE (NYSE:SAP) 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.
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.
