Is EPAM Systems (EPAM) A Smart Long-Term Buy?

Baron Funds, an asset management firm, published its “Baron FinTech Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 1.29% was delivered by the fund’s institutional shares for the Q1 of 2021, trailing the S&P 500 Index, which appreciated 6.17%, and modestly underperforming the FactSet Global FinTech Index which rose 2.77% for 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 its Q1 2021 investor letter, mentioned EPAM Systems, Inc. (NYSE: EPAM), and shared their insights on the company. EPAM Systems, Inc. is a Newtown, Pennsylvania-based software engineering company that currently has a $25.4 billion market capitalization. Since the beginning of the year, EPAM delivered a 26.01% return, extending its 12-month gains to 108.12%. As of May 14, 2021, the stock closed at $451.56 per share.

Here is what Baron FinTech Fund has to say about EPAM Systems, Inc. in its Q1 2021 investor letter:

EPAM Systems, Inc. provides outsourced software development to business customers. Shares gained after the company reported quarterly financial results that exceeded Street expectations. Demand is rebounding after last year’s slowdown as the pandemic has highlighted the need for greater investment in digital transformation. 2021 guidance calls for revenue growth to exceed 20% albeit with some temporary margin pressure from investments and catch-up spending. We continue to own the stock due to EPAM’s long runway for growth and strong execution.”

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Our calculations show that EPAM Systems, Inc. (NYSE: EPAM) 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, EPAM Systems, Inc. was in 32 hedge fund portfolios, compared to 33 funds in the third quarter. EPAM delivered a 12.81% 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.