Polen Capital Management recently released its Q3 2020 Investor Letter, a copy of which you can download here. During the third quarter of 2020, the Polen Focus Growth Composite Portfolio returned 10.15% gross of fees, while the Russell 1000 Growth Index was up 13.22% and the S&P 500 Index was up 8.93%. You should check out Polen Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.
In the said letter, Polen Capital highlighted a few stocks and Salesforce.Com Inc. (NYSE:CRM) is one of them. Salesforce.Com Inc. (NYSE:CRM) is a cloud-based software company. Year-to-date, Salesforce.Com Inc. (NYSE:CRM) stock gained 57.2% and on November 10th it had a closing price of $247.66. Here is what Polen Capital said:
“We think Salesforce.com is a good example of a dynamic we are seeing in this “new normal.” Today, our software businesses that are almost entirely cloud-based and subscription revenue models are proving to be highly resilient even in difficult economic times. In fact, across our software holdings, we are seeing extremely high retention rates and continued robust revenue growth even through the pandemic and recession.
We typically speak of the balance of growth and safety that we seek in our Portfolios. In the past, the safety-like holdings were slower growth and more consumer or healthcare-oriented businesses.
Much of this is because cloud subscription businesses, by nature, are more stable and recurring so long as the underlying services being provided remain mission critical to customers, which is exactly the point. Software businesses often already had network effects and monopoly or oligopoly like market structures in place. The subscription model can add the additional benefits of more stability through economic cycles and less piracy. We believe combining mission critical offerings with highly recurring business models can make these companies “new safeties.”
Copyright: drserg / 123RF Stock Photo
Last month, we published an article revealing that Salesforce.Com Inc. (NYSE:CRM) stock is one of the top 10 cloud computing stocks to buy right now.
In Q2 2020, the number of bullish hedge fund positions on Salesforce.Com Inc. (NYSE:CRM) stock decreased by about 9% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Salesforce’s growth potential. Our calculations showed that Salesforce.Com Inc. (NYSE:CRM) is ranked #17 among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 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. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
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 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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.
