Why Aspen Technology (AZPN) Stock is a Compelling Investment Case

Polen Capital Management recently released its Q3 2020 Investor Letter, a copy of which you can download here. During the third quarter of 2020, the Polen U.S. SMID Company Growth Composite Portfolio returned 7.11% gross of fees, while the Russell 2500 Growth Index was up 9.37%. You should check out Polen Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Polen Capital highlighted a few stocks and Aspen Technology Inc (NASDAQ:AZPN) is one of them. Aspen Technology Inc (NASDAQ:AZPN) is a software company. Year-to-date, Aspen Technology Inc (NASDAQ:AZPN) stock lost 1.3% and on November 11th it had a closing price of $119.31. Here is what Polen Capital said:

“We started a new position in Aspen Technology (AZPN). We previously owned this company in the U.S. Small Company Growth strategy, and sold it for market cap reasons. The company is a global leader in asset optimization software. Its solutions address complex, industrial environments where it is critical to optimize the asset design, operation and maintenance lifecycle. Companies in capitalintensive industries can use Aspen Technology’s unique set of assets to maximize uptime and push the limits of performance, running their assets safer, greener, longer and faster.

We had considered the company for the inception portfolio but decided to wait and watch it as we had concerns about how low oil prices and macroeconomic uncertainty back in March might affect their business. We have since been impressed with the company’s ability to navigate the tough macro environment, and oil prices have improved. We believe it has been able to deliver very attractive growth despite the macro uncertainty, giving us more confidence to start a position during the quarter. We think the company has an outstanding competitive position, a highly recurring business model, robust margins and returns, and a management team that exhibits all the behaviors that we seek, especially value-creating reinvestment.”

Last month, we published an article revealing that William Heard’s Heard Capital is bullish on Aspen Technology Inc (NASDAQ:AZPN) stock. The fund uses a bottom-up fundamental approach to analyze companies and identify opportunities where it believes equities are being mispriced by the market.

In Q2 2020, the number of bullish hedge fund positions on Aspen Technology Inc (NASDAQ:AZPN) stock increased by about 40% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Aspen Technology’s growth potential. Our calculations showed that Aspen Technology Inc (NASDAQ:AZPN) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 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.