Baron FinTech: “Duck Creek (DCT) has a Long Runway for Growth”

Baron Funds, an investment management firm, published its fourth quarter 2020 “Baron FinTech Fund” investor letter – a copy of which can be downloaded here. A return of 13.61% was recorded by its Retail Shares, and 13.67% by its Institutional Shares in the fourth quarter of 2020, both below its  FactSet Global FinTech Benchmark that delivered a 21.35% return but above its S&P 500 index that was up by 12.15% in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Baron FinTech Fund, in their Q4 2020 investor letter, mentioned Duck Creek Technologies, Inc. (NASDAQ: DCT) and emphasized their views on the company. Duck Creek Technologies, Inc. is a Boston, Massachusetts-based software company that currently has a $5.6 billion market capitalization. Since the beginning of the year, DCT delivered a -1.50% return, while its 3-month gains are also down by -6.71%. As of March 23, 2021, the stock closed at $42.65 per share.

Here is what Baron FinTech Fund has to say about Duck Creek Technologies, Inc. in their Q4 2020 investor letter:

“Duck Creek Technologies, Inc. is a leading provider of core systems software for the property & casualty (“P&C”) insurance industry. Despite reporting results that beat analyst forecasts, with subscription revenue up 54% and Saas annual recurring revenue up 85%, the stock price fell due to a rotation away from high-growth stocks. We retain conviction. Insurers are increasingly recognizing the need for modern, cloud-based software, and we like the company’s strong product set and long runway for growth.”

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Oleksiy Mark/

Our calculations show that Duck Creek Technologies, Inc. (NASDAQ: DCT) 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, Duck Creek Technologies, Inc. was in 22 hedge fund portfolios, compared to 21 funds in the third quarter. DCT delivered a -6.71% return in the past 3 months.