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 Shopify Inc. (NYSE:SHOP) in its Q2 2024 investor letter. Headquartered in Ottawa, Canada, Shopify Inc. (NYSE:SHOP) provides a cloud-based commerce platform and services. The one-month return of Shopify Inc. (NYSE:SHOP) was -1.21%, and its shares lost 3.56% of their value over the last 52 weeks. On July 18, 2024, Shopify Inc. (NYSE:SHOP) stock closed at $63.11 per share with a market capitalization of $81.312 billion.
Polen Focus Growth Strategy stated the following regarding Shopify Inc. (NYSE:SHOP) in its Q2 2024 investor letter:
“In the second quarter, we purchased new positions in Shopify Inc. (NYSE:SHOP). Shopify, a leading cloud-native commerce software platform, is a business we’ve been studying since 2018 and have long admired. Shopify’s business model combines 1) a mission-critical software business where merchants can run all their business operations from one dashboard and 2) a payments business with a long runway to increase attach rates and grow alongside merchants. Additionally, we believe the business possesses significant optionality to continue attaching existing merchant solutions and adding more merchant services as high-margin cross-sells. With several powerful tailwinds at their back (e-commerce, mobile commerce, social media, digital payments, seamless omnichannel, DTC, cloud software digitization) and a highly scalable business model, we think their growth will likely be stronger for longer than investors expect.”
A shopper browsing through products online from the comfort of their home.
Shopify Inc. (NYSE:SHOP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held Shopify Inc. (NYSE:SHOP) at the end of the first quarter which was 68 in the previous quarter. In the first quarter, Shopify Inc.’s (NYSE:SHOP) revenue grew by more than 25%, excluding logistics (see the details here). While we acknowledge the potential of Shopify Inc. (NYSE:SHOP) 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 Shopify Inc. (NYSE:SHOP) and shared ClearBridge Growth Strategy’s views on the company. 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.
