The London Company SMID Cap Strategy Exited Endava plc (DAVA) after the Acquisition Announcement

The London Company, an investment management company, released “The London Company SMID Cap Strategy” second quarter 2024 investor letter. A copy of the same can be downloaded here. US markets posted mixed results in Q2. The portfolio fell 5.7% (5.9%, net) compared to a 4.3% decrease for the Russell 2500 Index. Both stock selection and sector exposure led the portfolio to underperform in the quarter. For more information on the fund’s top picks in 2024, please check its top five holdings.

The London Company SMID Cap 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 -11.37%, and its shares lost 41.98% of their value over the last 52 weeks. On August 9, 2024, Endava plc (NYSE:DAVA) stock closed at $28.38 per share with a market capitalization of $1.639 billion.

The London Company SMID Cap Strategy stated the following regarding Endava plc (NYSE:DAVA)  in its Q2 2024 investor letter:

“Exited: Endava plc (NYSE:DAVA) – Our holding period for DAVA was much shorter than expected. We purchased the shares in late 2023, but sold reflecting a change in capital allocation after DAVA announced a large acquisition that we believe is outside of their core competency.”

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. Polen U.S. SMID Company Growth Strategy sold its holdings in Endava plc (NYSE:DAVA) during Q2 2024.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.