Polen Capital, an investment management company, released its “Polen U.S. SMID Company Growth Strategy” second-quarter 2024 investor letter. A copy of the same can be downloaded here. The portfolio returned -8.42% gross and -8.71% net of fees in the second quarter compared to a -4.22% return for the Russell 2500 Growth Index. In the second quarter, there was a shift from lower-quality, high-priced stocks to a more cautious approach due to concerns about high inflation. This led to a widening performance gap between small and mid-sized and large company stocks, as investors turned to lower-volatility sectors. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Polen U.S. SMID Company Growth Strategy highlighted stocks like Endava plc (NYSE:DAVA), in the second quarter 2024 investor letter. Endava plc (NYSE:DAVA) is a technology services provider for clients in the consumer products, healthcare, mobility, and retail verticals. The one-month return of Endava plc (NYSE:DAVA) was 3.34%, and its shares lost 39.68% of their value over the last 52 weeks. On July 29, 2024, Endava plc (NYSE:DAVA) stock closed at $30.96 per share with a market capitalization of $1.788 billion.
Polen U.S. SMID Company Growth Strategy stated the following regarding Endava plc (NYSE:DAVA) in its Q2 2024 investor letter:
“We also sold our position in Endava plc (NYSE:DAVA). Broadly speaking, the IT services industry has been particularly hard hit by the slowdown in IT spending. Endava, in particular, didn’t hold up as well as its peers in our view, given that it is earlier in its life cycle, less diversified, and with significant exposure to the U.K. and Europe, which have fared worse. We still believe Endava is a fundamentally good business and significantly undervalued, but we believe we identified a better opportunity to redeploy the capital in Repligen.”
A tech expert in a suit presenting a new IT strategy in front of a corporate audience.
Endava plc (NYSE:DAVA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held Endava plc (NYSE:DAVA) at the end of the first quarter which was 10 in the previous quarter. In the quarter, Endava plc’s (NYSE:DAVA) revenues came in at £174.4 million, which was within revenue guidance representing an 11.8% year-over-year decline in constant currency. While we acknowledge the potential of Endava plc (NYSE:DAVA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Endava plc (NYSE:DAVA) and shared Argosy Investors’ views on the company. Endava plc (NYSE:DAVA) was a significant absolute detractor of Polen U.S. SMID Company Growth Strategy in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
