Harding Loevner, an asset management company, released its “Global Equity Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund generated a 6.9% gross of fee return in the first quarter compared to an 8.3% gain for the MSCI All Country World. Despite rising bond yields, the stock market gained throughout the quarter, partly because of continued interest in the potential applications of artificial intelligence. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Harding Loevner Global Equity Strategy highlighted stocks like SAP SE (NYSE:SAP), in the first quarter 2024 investor letter. SAP SE (NYSE:SAP) is a global provider of applications, technology, and services. The one-month return of SAP SE (NYSE:SAP) was -0.22%, and its shares gained 36.38% of their value over the last 52 weeks. On May 30, 2024, SAP SE (NYSE:SAP) stock closed at $180.25 per share with a market capitalization of $212.538 billion.
Harding Loevner Global Equity Strategy stated the following regarding SAP SE (NYSE:SAP) in its first quarter 2024 investor letter:
“In Germany, investors were positively surprised by SAP SE’s (NYSE:SAP) strong progress in migrating customers to new, cloud-based software solutions and management’s projection that growth will accelerate next year as a result.
SAP shares have recently outperformed as some long-term initiatives bear fruit. SAP has been on a multi-year journey to transform its renowned but somewhat monolithic Enterprise Resource Planning (‘ERP’) software—the digital brain of a large enterprise’s daily operations—into a more modern and modular cloud-based architecture, called SAP S/4HANA. This transition, which started long before generative AI rose to prominence, was intended to make it easier to analyze the vast data captured by ERP, but it has also situated the platform well for the AI era. In the most recent quarter, revenue from SAP’s cloud business, which grew 20% year over year, surpassed revenue from its shrinking legacy business of software licenses. The company expects this growth to be sustained in 2024 and 2025.
This quarter, SAP announced another initiative—to invest almost 1 billion euros in AI over the next two years and an additional 2 billion euros to restructure its workforce. Because of these programs, the company is projecting free cash flow will reach 8 billion euros in 2025, up from an earlier forecast of 7.5 billion euros. ERP was long considered an immutable piece of tech due to the critical and complex nature of the software; some have compared making changes to ERP systems to performing open-heart surgery. But SAP’s efforts to modernize ERP and revitalize its business seem to be working, and that work is becoming more appreciated by the market.”
A data centre room with cloud technology, illustrating the enterprise application software services.
SAP SE (NYSE:SAP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held SAP SE (NYSE:SAP) at the end of the first quarter which was 22 in the previous quarter.
SAP SE (NYSE:SAP) is off to a great start in Q1 and has established a strong base for growth. SAP SE (NYSE:SAP) reported first-quarter revenue of nearly $8 billion, up 9% year-over-year, showing continued growth momentum.
In another article, we discussed SAP SE (NYSE:SAP) and shared Jim Cramer’s latest stock picks in May 2024. Polen Global Growth Strategy commented about SAP SE (NYSE:SAP) in its first quarter 2024 investor letter. In addition, please check out our hedge fund investor letters Q1 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.
