Polen Capital Management recently released its Q2 2020 Investor Letter, a copy of which you can download here. During the second quarter of 2020, the Polen Global Growth Model Portfolio returned 20.58% gross of fees, while the MSCI All Country World Index was up 19.22%. You should check out Polen Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.
In the said letter, Polen Capital highlighted a few stocks and SAP SE (NYSE:SAP) is one of them. SAP SE (NYSE:SAP) is a software company. Year-to-date, SAP SE (NYSE:SAP) stock gained 18.8% and on July 17th it had a closing price of $156.28. Here is what Polen Capital said:
“SAP, on the other hand, will likely be less affected in the near term by the COVID-19 shutdowns in our view. While it certainly will be impacted as countries around the world face GDP declines, Enterprise Resource Planning software is mission-critical, and we think the company’s cloud offerings will continue to benefit from its S/4 upgrade cycle.
Despite SAP’s strength, recurring revenue and durability, it was trading at about 20x forward earnings. While we do not focus on macroeconomics or speculate on related market movements, member states across Europe were unable to execute a coordinated effort to provide liquidity as quickly as the U.S. or other countries. We suspect the absence of a swift and unified response is at least partially responsible for most European indices being negative 20-30% in early May while the S&P 500 was only down 10%. Regardless of the cause, we think SAP is reasonably valued for such a strong and resilient growth business. While a less robust policy response could mean that it takes longer for growth to recover in Europe, SAP earns almost 70% of its revenues from outside of the continent.”
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In Q1 2020, the number of bullish hedge fund positions on SAP SE (NYSE:SAP) stock decreased by about 6% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with SAP’s growth potential. Our calculations showed that SAP SE (NYSE:SAP) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
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Disclosure: None. This article is originally published at Insider Monkey.
