Polen Capital Management recently released its Q3 2020 Investor Letter, a copy of which you can download here. During the third quarter of 2020, the Polen Global Growth Composite Portfolio returned 9.09% gross of fees, while the MSCI All Country World Index was up 8.14%. You should check out Polen Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.
In the said letter, Polen Capital highlighted a few stocks and Automatic Data Processing Inc (NASDAQ:ADP) is one of them. Automatic Data Processing Inc (NASDAQ:ADP) is a provider of human resources management software and services. Year-to-date, Automatic Data Processing Inc (NASDAQ:ADP) stock lost 13.5% and on October 21st it had a closing price of $146.85. Here is what Polen Capital said:
“While ADP is typically a very steady business, the decline in employment levels—particularly among small businesses—and lower interest rates will likely negatively affect near-term profitability. Management guided to a larger than expected decline in profits for the fiscal year ended June 30, 2021. The decline in employment for ADP’s customers, what it calls “pays per control,” has a high decremental margin impact. Highly profitable revenues are lost, but most of ADP’s costs of serving the client remain. While the opposite is also true, and adding these employees back to payrolls will provide high incremental margins, a full recovery in employment may take some time.”
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In Q2 2020, the number of bullish hedge fund positions on Automatic Data Processing Inc (NASDAQ:ADP) stock increased by about 7% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in ADP’s growth potential. Our calculations showed that Automatic Data Processing Inc (NASDAQ:ADP) 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
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free enewsletter below to receive our stories in your inbox:
Disclosure: None. This article is originally published at Insider Monkey.
