Here’s Why Polen Capital Exited its Estee Lauder (EL) Position

Polen Capital, an investment management firm, published its “Polen Global Growth” third quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly gross return of -3.03% was delivered by the fund for the third quarter of 2021, versus the MSCI AllCountry World Index (the “Index”)’s return of -1.06% for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Polen Global Growth, in its Q3 2021 investor letter, mentioned The Estée Lauder Companies Inc. (NYSE: EL) and discussed its stance on the firm. The Estée Lauder Companies Inc. is a New York, New York-based makeup company with a $125 billion market capitalization. EL delivered a 30.43% return since the beginning of the year, while its 12-month returns are up by 43.52%. The stock closed at $354.46 per share on November 17, 2021.

Here is what Polen Global Growth has to say about The Estée Lauder Companies Inc.  in its Q3 2021 investor letter:

“Finally, exiting our position in Estee Lauder was purely a function of valuation. With the business trading for up to 45x forward earnings, we felt we had more attractive alternatives. We maintain high conviction in the company and their competitive advantages and hope to be owners again, at a more attractive valuation. In short, we sold what we believe to be very a high-quality business at relatively high valuations to fund the purchase of equally high-quality businesses trading at lower valuations and even better long-term earnings growth prospects. While we are certainly not tactical in approach, we do aim to make prudent adjustments over time.”

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Based on our calculations, The Estée Lauder Companies Inc. (NYSE: EL) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. EL was in 50 hedge fund portfolios at the end of the first half of 2021, compared to 59 funds in the previous quarter. The Estée Lauder Companies Inc. (NYSE: EL) delivered a 6.05% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.