Is RealPage (RP) a Smart Long-term Buy?

Brown Capital Management Mid Company Fund recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 6.15% (inst. class) for the quarter, underperforming its benchmark, the Russell Midcap Growth Index which returned 9.4% in the same quarter. You should check out Brown Capital Management’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Brown Capital Management highlighted a few stocks and RealPage Inc. (NASDAQ:RP) is one of them. RealPage Inc. (NASDAQ:RP) is a software company. Year-to-date, RealPage Inc. (NASDAQ:RP) stock gained 23.8% and on December 15th it had a closing price of $66.55. Here is what Brown Capital Management said:

“RealPage produces software and data analytics for the multifamily rental real-estate industry to manage properties, develop market intelligence and make better operational and financial decisions for properties. In particular, we view the real-estate software market as divided between small, owner-operator property managers and large, sophisticated, institutional property managers. RealPage serves the institutional portion of the market as a popular cloud-based solution among property managers and property owners.

In July, the company reported second-quarter sales and earnings that exceeded Wall Street expectations and also raised its 2020 sales-growth guidance. Despite the positive report, management noted that the high end of the outlook was contingent on Congress reauthorizing stimulus payments to households and enhanced unemployment benefits. At this time, it remains unclear if those payments will be renewed and how large they will be. Furthermore, the patchwork of federal, state and local moratoriums on evictions, as well as the opacity of how landlords will get reimbursed for missed rent payments, adds further uncertainty.

Although we do not enjoy the short-term disruption to the business, we like the long-term outlook for greater software adoption in multifamily property management. Reflecting the opportunity for further innovation, at its user conference in September, RealPage unveiled new options in smart and connected apartments, online resident engagement, artificially intelligent revenue management, virtual leasing and several other capabilities. We believe the multifamily real-estate industry has ample opportunity to improve its operations through software, creating many more years of low double-digit annual revenue growth for RealPage.”

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In Q2 2020, the number of bullish hedge fund positions on RealPage Inc. (NASDAQ:RP) stock increased by about 34% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in RealPage’s growth potential. Our calculations showed that RealPage Inc. (NASDAQ:RP) isn’t ranked among 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

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

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