Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned -0.11% (gross) and -0.31% (net) compared to 8.33% for the Russell 1000 Growth Index and 4.28% for the S&P 500 Index. Generative AI (GenAI) remains the dominant market narrative in the second quarter. The portfolio does not own NVIDIA or other Semiconductor companies that are presently benefitting from the demand for AI hardware. However, with the portfolio’s extensive investment in software and IT services, the firm anticipates that GenAI’s long-term economic gains will go to these industries. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Polen Focus Growth Strategy highlighted stocks like Autodesk, Inc. (NASDAQ:ADSK) in its Q2 2024 investor letter. Autodesk, Inc. (NASDAQ:ADSK) offers 3D design, engineering, and entertainment technology solutions. The one-month return of Autodesk, Inc. (NASDAQ:ADSK) was 1.37%, and its shares gained 15.16% of their value over the last 52 weeks. On July 19, 2024, Autodesk, Inc. (NASDAQ:ADSK) stock closed at $242.45 per share with a market capitalization of $52.25 billion.
Polen Focus Growth Strategy stated the following regarding Autodesk, Inc. (NASDAQ:ADSK) in its Q2 2024 investor letter:
“Autodesk, Inc. (NASDAQ:ADSK) and Accenture were also notable absolute detractors in the quarter. With Autodesk, most of the stock’s price weakness came in April. The company announced that it would delay the release of its earnings and 10-K filing as it launches an internal investigation regarding its practices on some non-GAAP financial metrics. Upon further analysis, we were encouraged to hear that they were taking this very seriously and being very comprehensive in their investigation. Ultimately, Accenture announced it was closing the investigation and that no re-statements would be required. As discussed in the following section, we chose to exit the position in favor of a more attractive investment.
We sold our small position in Autodesk to help fund our purchase of Shopify. We still think Autodesk is an advantaged business, with 95%+ recurring revenue, dominant in its end market, and nice tailwinds behind digitization in that end market. It should be a durable grower over time, perhaps with continued fits and starts, but we found the risk-reward around Shopify to be more compelling.”
A software engineer using AutoCAD Civil 3D to create a 3D design in a modern office setting.
Autodesk, Inc. (NASDAQ:ADSK) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held Autodesk, Inc. (NASDAQ:ADSK) at the end of the first quarter which was 46 in the previous quarter. While we acknowledge the potential of Autodesk, Inc. (NASDAQ:ADSK) 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 Autodesk, Inc. (NASDAQ:ADSK) and shared the list of stocks targeted by activist investors right. 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.
