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Why Guidewire Software (GWRE) Stock is a Compelling Investment Case

Baron Asset Fund recently published its second-quarter commentary – a copy of which can be downloaded here. During the second quarter of 2020, the Baron Asset Fund returned 28.02% (institutional shares). In comparison, the benchmark S&P 500 Index was up 20.54%, while the Russell Midcap Growth Index was up 30.26%. You should check out Baron Asset Fund’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Baron Asset Fund highlighted a few stocks and Guidewire Software Inc. (NYSE:GWRE) is one of them. Guidewire Software Inc. (NYSE:GWRE) is a software publisher based in California. Year-to-date, Guidewire Software Inc. (NYSE:GWRE) stock gained 7.5% and on July 10th it had a closing price of $117.15. Here is what Baron Asset Fund said:

“Guidewire Software, Inc. provides core operating systems to property and casualty (“P&C”) insurers. Its shares gained as its reported earnings and revenue exceeded most analysts’ expectations. In addition, Guidewire continued to make progress in signing deals for cloud-based implementation of its software. We believe this is noteworthy because widespread adoption of its cloud-based solutions should result in significant expansion of its addressable market opportunity, as well as a higher valuation for the company’s shares. Guidewire retains leading market share and its win rate for new clients remains unchanged. In addition, we believe that the pandemic is likely to accelerate the pace of digital transformation in the P&C industry, which should benefit Guidewire.”

11 Highest Paying Countries for Information Technology Professionals

In Q1 2020, the number of bullish hedge fund positions on Guidewire Software Inc. (NYSE:GWRE) stock increased by about 6% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Guidewire Software’s upside potential. Our calculations showed that Guidewire Software Inc. (NYSE:GWRE) 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. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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