Is Anaplan Inc. (PLAN) A Good Investment Choice?

Alger, an investment management firm, published its “Alger Mid Cap Focus Fund” first quarter 2021 investor letter – a copy of which can be downloaded here.  During the quarter, the largest portfolio sector weightings for the fund were Consumer Discretionary and Information Technology. The fund’s largest sector overweight was Consumer Discretionary. Class Z shares of the Alger Mid Cap Focus Fund outperformed the Russell Midcap Growth Index during the first quarter of 2021. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Alger Mid Cap Focus Fund, in their Q1 2021 investor letter, mentioned Anaplan, Inc. (NYSE: PLAN) and shared their insights on the company. Anaplan, Inc. is a San Francisco, California-based software company that currently has an $8.6 billion market capitalization. Since the beginning of the year, PLAN delivered a -15.78% return, while its 12-month gains to 61.32%. As of April 16, 2021, the stock closed at $60.51 per share.

Here is what Alger Mid Cap Focus Fund has to say about Anaplan, Inc. in their Q1 2021 investor letter:

“Anaplan, Inc. was among the top detractors from performance. Anaplan is a leading provider of cloud-based business planning software. Anaplan’s software platform aims to solve the most complex planning needs of large global enterprises across various business lines. Unlike traditional business planning software, which is often rigid, siloed and opaque, Anaplan’s platform is designed to enable broader enterprise participation and better workforce collaboration during the business planning process. Through better planning, large enterprises can more effectively allocate resources to cut costs and generate revenue. Today Anaplan has over 1,600 customers across a variety of end markets and business use cases.

Anaplan shares underperformed in the first quarter as part of a broader sector rotation as high-growth software stocks fell out of favor relative to more cyclically exposed investment opportunities. We believe Anaplan’s focus on growth over near-term profit generation negatively impacts the company’s stock in a rising interest rate environment.

Fundamentally, Anaplan had strong fourth quarter earnings result, with the company seeing an acceleration of billings growth
and a strong demand pipeline as companies realize the need for a more flexible digital planning solution.”

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Our calculations show that Anaplan, Inc. (NYSE: PLAN) 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, Anaplan, Inc. was in 63 hedge fund portfolios, compared to 55 funds in the third quarter. PLAN delivered a -14.65% 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.