White Falcon Capital Management, an investment fund manager, released its third quarter 2024 investor letter. A copy of the letter can be downloaded here. It was a good quarter for the fund fueled by precious metal royalty companies. In the third quarter, the fund returned 6.0% compared to a 4.5% return for the S&P 500 (CAD), 4.9% for the MSCI All Country (CAD), and 10.6% for the S&P TSX TR. In addition, please check the fund’s top five holdings to know its best picks in 2024.
White Falcon Capital Management highlighted stocks like Endava plc (NYSE:DAVA), in the third 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 1.82%, and its shares lost 57.24% of their value over the last 52 weeks. On November 1, 2024, Endava plc (NYSE:DAVA) stock closed at $23.71 per share with a market capitalization of $1.4 billion.
White Falcon Capital Management stated the following regarding Endava plc (NYSE:DAVA) in its Q3 2024 investor letter:
“IT services companies – Endava plc (NYSE:DAVA) and EPAM – have been the main detractors for our portfolio this year. Admittedly, we have been early. However, we have checked and rechecked our work and believe these businesses are nearing their bottom. In the appendix to this letter, we outline our investment thesis for Endava and explain why we think it deserves to be our top position in the portfolio. We believe Endava (and EPAM) present a compelling opportunity due to their (1) solid position in the growing IT services sector, particularly in digital transformation and AI implementation, (2) overall business quality and founder led management teams, and (3) cheap valuation where we believe they are trading for a trough multiple of trough earnings. Despite recent revenue challenges, these businesses have maintained positive free cash flow. In fact, EPAM has been on the offensive and used its cash reserves to make four acquisitions in the last 12 months taking advantage of the weak IT spending environment. With improving IT spending and a strong management team Endava and EPAM are well-positioned for recovery and long-term growth.”
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 second quarter which was 16 in the previous quarter. In the fourth quarter of fiscal year 2024, Endava plc’s (NYSE:DAVA) revenues came in at GBP194.4 million, representing a 2.4% year-over-year increase. 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 high growth UK stocks to invest in. White Falcon Capital Management increased its position in Endava plc (NYSE:DAVA) in the previous quarter. 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.