Should You Consider Investing in Endava (DAVA)?

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 Endava plc (NYSE: DAVA), and shared their insights on the company. Endava plc is a UK-based software company that currently has a $5.6 billion market capitalization. Since the beginning of the year, DAVA delivered a 21.03% return, extending its 12-month gains to 110.97%. As of May 14, 2021, the stock closed at $92.89 per share.

Here is what Baron FinTech Fund has to say about Endava plc in its Q1 2021 investor letter:

Endava plc provides outsourced software development to business customers. Share price appreciation was driven by continued revenue and earnings growth. Following a brief slowdown during the early months of the pandemic, business has returned to normal as clients recognize the need for greater investment in digital transformation. Management expects organic
revenue growth will return to the 20%-plus range with additional growth from accretive acquisitions. We believe Endava will continue gaining share in a large global market for IT services.”

Our calculations show that Endava plc (NYSE: DAVA) 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, Endava plc was in 10 hedge fund portfolios, compared to 11 funds in the third quarter. DAVA delivered an 8.14% 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.