Polen Capital, an investment management firm, published its “Polen International Growth” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of -1.14% was delivered by the fund for the Q1 of 2021, trailing its MSCI All Country World benchmark that delivered a 3.49% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Polen International Growth Fund, in its Q1 2021 investor letter, mentioned Aon plc (NYSE: AON), and shared their insights on the company. Aon plc is an insurance company that currently has a $57.3 billion market capitalization. Since the beginning of the year, AON delivered a 20.34% return, extending its 12-month gains to 32.64%. As of May 14, 2021, the stock closed at $254.24 per share.
Here is what Polen International Growth Fund has to say about Aon plc in its Q1 2021 investor letter:
“Ireland-based professional services firm Aon contributed positively as well. Aon derives 70% of its revenues from services around the property and casualty insurance market, with the remaining 30% of sales split evenly between health and retirement solutions.
In short, Aon’s representatives help clients manage business risks and employee benefits. Although the pandemic disrupted businesses everywhere, more than 80% of Aon’s revenues come from recurring sources. We think this lends a measure of stability to the business.
Beyond Aon’s core recurring business, other potential avenues of growth exist.
First, the ability to comb troves of risk data lets Aon develop insights. These insights can further benefit partners in its ecosystem, either those underwriting risk or those purchasing protection, in ways that empower stakeholders. Second, risks from issues like pandemics, cybersecurity, and climate change are becoming more evident, and companies are generally not well protected. Aon enables the provision of better protection from these risks. Third, Aon’s agreement to acquire Willis Towers Watson (WTW), the number three player in the industry, is expected to close in the first half of 2021. The acquisition would make Aon the number one player in the industry, which we anticipate will enhance its scale and analytics advantages. With a track record of solid acquisition integration, we believe Aon management will exceed their planned merger integration
objectives devised in consultation with WTW management.
We think Aon is a steady grower with a sharp management team focused on efficiency gains and increasing their already significant free cash flow generation. We feel Aon can continue to grow its earnings at a low to mid-teens rate for the coming five years.”
Our calculations show that Aon plc (NYSE: AON) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Aon plc was in 63 hedge fund portfolios, compared to 52 funds in the third quarter. AON delivered a 11.49% return in the past 3 months.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 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. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.