Polen Capital Management, a value-driven, concentrated, long-term investment management firm, published its ‘Polen Focus Growth’ fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 10.15% was recorded by the fund for the Q4 of 2020, below its S&P 500 benchmark that delivered a 12.15% return, and Russell 1000 index that returned 11.39%. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Polen Focus Growth, in their Q4 2020 Investor Letter said that their position in Salesforce.com, inc. (NYSE: CRM) was one of the bottom contributors for the fund during the fourth quarter of 2020. Salesforce.com, inc. is a customer relationship management platform company that has a $218.4 billion market cap. For the past 3 months, CRM delivered a -8.55% return and settled at $237.98 per share at the closing of February 4th.
Here is what Polen Focus Growth has to say about Salesforce.com, inc. in their investor letter:
“We discussed Salesforce.com in the third quarter, but the former went from our top contributor last quarter to the largest detractor this quarter. The double-digit share price decline in the quarter seemed mostly driven by investor reaction after Salesforce announced it would acquire Slack, a collaboration software company, for approximately $28 billion, a high purchase price. While the purchase price is higher than we expected, we believe Slack and its functionality fit well strategically with Salesforce’s suite of enterprise software offerings. At a high-level, Slack offers the ability to make both Salesforce’s and other third-party applications work better for their respective customers. In addition, Salesforce’s world-class selling organization and already large customer base should be beneficial for Slack’s subscription revenue growth, which has been more customer-referral based up to this point. It is too early to know if this acquisition will prove to be a smart allocation of investor capital. That said, Slack has a unique value proposition and was growing nicely on a standalone basis. We believe the Salesforce-Slack strategic vision is on point; and although the purchase price is high in absolute dollars, it represents less than 15% of Salesforce’s market capitalization.
We maintain an optimistic view of Salesforce’s business, its competitive positioning within enterprise software, and the rationale behind the Slack acquisition. We expect strong, continued earnings and free cash flow growth many years into the
future.”
Pixabay/Public Domain
Last November 2020, we published an article telling that Salesforce.com, inc. (NYSE: CRM) was in 106 hedge fund portfolios. Its all time high statistics is 117. CRM delivered a 27.45% return in the past 12 months.
Our calculations show that Salesforce.com, inc. (NYSE: CRM) does not belong in our list of the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 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.
