Polen Capital, an investment management company, released its “Polen Global Growth Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. Volatility returned in the third quarter, in contrast to the first half of the year characterized by an increasingly crowded AI trade. The Strategy returned 3.85% gross (3.54% net) compared to the MSCI ACW Index’s 6.61% return. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Polen Global Growth Strategy highlighted stocks like SAP SE (NYSE:SAP), in the third 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 0.42%, and its shares gained 54.32% of their value over the last 52 weeks. On November 14, 2024, SAP SE (NYSE:SAP) stock closed at $231.40 per share with a market capitalization of $271.765 billion.
Polen Global Growth Strategy stated the following regarding SAP SE (NYSE:SAP) in its Q3 2024 investor letter:
“In the third quarter, the top relative and absolute contributors to the Portfolio’s performance were MSCI, SAP SE (NYSE:SAP), and AON. SAP reported a good quarter, reflecting solid cloud adoption and disciplined execution around their transformation program, which will help the company focus resources on their most strategic growth opportunities. We view SAP as one of the more resilient software business models as it is an essential part of their customers’ day-to-day operations and cannot easily be turned off or scaled back. Given its attractive market position, vast partner ecosystem, balanced growth across new and existing customers, high recurring revenues, and improving margin profile, we think SAP is well-positioned to continue delivering at least mid-teens earnings growth for many years.
We modestly trimmed our position in SAP, though it remains among our largest holdings. When we reduced the position, shares had appreciated nearly 40% YTD due to strong business performance accompanied by multiple expansions. While our conviction in the business remains high, we felt it was appropriate to taper back what had become a very large position, especially with the valuation at the upper end of its range.”
A data centre room with cloud technology, illustrating the enterprise application software services.
SAP SE (NYSE:SAP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held SAP SE (NYSE:SAP) at the end of the second quarter which was 24 in the previous quarter. SAP SE (NYSE:SAP) reported total revenue of EUR8.5 billion in Q3, up 10% year-over-year. While we acknowledge the potential of SAP SE (NYSE:SAP) 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 SAP SE (NYSE:SAP) and shared the list of best predictive analytics stocks to invest in. In addition, please check out our hedge fund investor letters Q3 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.
