3. Accenture Plc (NYSE:ACN)
AKO Capital’s Stake Value: $718.7 million
Percentage of AKO Capital’s 13F Portfolio: 7.44%
Number of Hedge Fund Holders: 52
Accenture Plc (NYSE:ACN) is a Dublin-based multinational professional services company that specializes in IT services and consulting. The company operates through its Communications, Media and Technology Financial Services Health and Public Service Products, and Resources segments.
According to the third quarter 13F filings, Nicolai Tangen’s AKO Capital holds over 2.24 million shares of Accenture Plc (NYSE:ACN), amounting to over $718.7 million in worth and representing 7.44% of the fund’s total portfolio value.
On September 27, Barclays analyst Ramsey El-Assal raised his price target on Accenture Plc (NYSE:ACN) to $384 from $335, and kept an Overweight rating on the shares of the company.
Fiduciary Management, in their Q1 2021 investor letter, mentioned Accenture plc (NYSE:ACN). Here is what the fund had to say:
“Even great companies can get too expensive. In early January, we sold our long-standing position in Accenture PLC after the company’s valuation exceeded 30 times next 12 months (NTM) earnings per share (EPS). We originally invested in Accenture at the launch of the FMI International strategy at a valuation below 15 times NTM EPS and held the stock for over ten years. We added to the holding numerous times in the early years, growing the position size to as high as 5.5% in late 2014, before dialing it back in recent years as the valuation became less compelling. It is one of the world’s largest information technology services firms, specializing in helping complex, global businesses navigate disruption, and focusing on next-generation services like digital, cloud, and security. For years, the investment allowed FMI to capture the inherently higher growth of technology-related industries (GDP+) without investing directly in pure “invention-oriented” technology companies. Through Accenture we were able to avoid some of the shortfalls of tech investing: technology obsolescence, short product cycles, and subpar return on invested capital (ROIC). It grew steadily, was solidly profitable, capital-light, and generated high returns, all while maintaining a rock-solid balance sheet. It compounded its business value for many years, outperforming the MSCI EAFE indices by over 450% during our holding period. Unfortunately, the market increasingly recognized the company’s positive attributes, and the stock’s discount to intrinsic value slowly evaporated. Despite our admiration for the business, it exceeded our valuation threshold. We will continue to follow the company closely for future opportunities.”
