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Adobe (ADBE) and Autodesk (ADSK) Performed Poorly, Became Polen Capital’s Top Detractors

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Polen Capital, an investment management firm, published its “Polen Global Growth” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 1.39% was delivered by the fund for the Q1 of 2021, trailing its MSCI All-Country World benchmark that delivered a 4.58% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Polen Global Growth Fund, in their Q1 2021 investor letter, mentioned Adobe Inc. (NASDAQ: ADBE) and Autodesk, Inc. (NASDAQ: ADSK). Adobe Inc. is a San Jose, California-based computer software company that currently has a $232 billion market capitalization, while Autodesk, Inc. is a San Rafael, California-based software company that currently has a $60.8 billion market capitalization. Since the beginning of the year, ADBE delivered a -2.99% return, while its 12-month gains are up by 32.81%. On the other hand, ADSK delivered a -9.34% year-to-date return, while its 12 month gains are up by 53.18%. As of May 13, 2021, ADBE closed at $474.16, and ADSK ended the day at $269.72 per share.

Here is what Polen Global Growth Fund has to say about Alphabet Inc. in its Q1 2021 investor letter:

"Adobe and Autodesk are both prime examples of the rotation that occurred during the quarter. Both are dominant businesses in their respective markets, which are experiencing structural tailwinds. Despite each business’s position of strength, the stocks of cyclicals and businesses with higher leverage and lower profitability were more favored this past quarter. In stark contrast, Adobe and Autodesk both have low leverage, high levels of profitability, high recurring revenues that mitigate cyclicality, and are both capital-light business models—all attributes we appreciate as investors. Adobe and Autodesk were also two of the top three performers within the Portfolio during 2020."

Adobe
Adobe

Our calculations show that Adobe Inc. (NASDAQ: ADBE) ranks 16th, while Autodesk, Inc. (NASDAQ: ADSK) 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, Adobe Inc. was in 114 hedge fund portfolios, compared to 106 funds in the third quarter. Meanwhile, Autodesk, Inc. was in 66 hedge fund portfolios, versus the 65 funds in the third quarter. ADBE and ADSK delivered a -2.74% and -9.36% returns respectively 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.