Polen Capital on Alight (ALIT): “We Believe the Business Remains Healthy”

Polen Capital, an investment management firm, released its “U.S. Small Company Growth Fund” third quarter 2023 investor letter, a copy of which can be downloaded here. In the third quarter, the U.S. Small Company Growth Composite Portfolio, referred to as the “Portfolio,” posted returns of -3.66% gross and -3.97% net of fees. This performance is in contrast to the -7.32% return of the Russell 2000 Growth Index, known as the “Index.” Take a moment to review the fund’s top 5 holdings to gain insights into their primary investment choices for 2023.

In its Q3 2023 investor letter, Polen U.S. Small Company Growth mentioned Alight, Inc. (NYSE:ALIT) and explained its insights for the company. Alight, Inc. (NYSE:ALIT) is an Illinois-based cloud-based human capital technology and services provider with a $3.9 billion market capitalization. Alight, Inc. (NYSE:ALIT) delivered a -13.76% return since the beginning of the year, while its 12-month returns are down by -17.32%. The stock closed at $7.21 per share on November 3, 2023.

Here is what Polen U.S. Small Company Growth has to say about Alight, Inc. (NYSE:ALIT) in its Q3 2023 investor letter:

“Alight is a leading cloud-based provider of employee engagement tools and solutions for workplace benefits, payroll, administration, and wealth services. The stock negatively reacted to lower-than-expected bookings guidance for its small but growing business-process-as-a-Service (“BPaaS”) segment. Due to the nature of Alight’s business model, the market is putting too much emphasis on BPaaS bookings, in our opinion, which is a flawed metric. We believe business remains healthy, and our long-term expectations for high-single-digit revenue growth with expanding margins remain unchanged.”

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Our calculations show that Alight, Inc. (NYSE:ALIT) does not belong on our list of the 30 Most Popular Stocks Among Hedge Funds. Alight, Inc. (NYSE:ALIT) was in 32 hedge fund portfolios at the end of the second quarter of 2023, compared to 41 funds in the previous quarter. Alight, Inc. (NYSE:ALIT) delivered a -14.98% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q3 2023 page.

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