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Oakmark Global Fund is Bullish SAP SE (SAP)

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Oakmark Funds, an investment management firm, published its “Oakmark Global Fund” first quarter 2021 investor letter – a copy of which can be seen here. A return of 11.1% was reported by the fund for the Q1 of 2021, outperforming both its MSCI World benchmark that delivered a 4.9% return and the Lipper Global Fund Index that had 3.7% gain for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Oakmark Global Fund, in their Q1 2021 investor letter, mentioned SAP SE (NYSE: SAP) and shared their insights on the company. SAP SE is a Walldorf, Germany-based software corporation that currently has a $156.1 billion market capitalization. Since the beginning of the year, SAP delivered a 1.54% return, extending its 12-month gains to 7.35%. As of April 12, 2021, the stock closed at $132.40 per share.

Here is what Oakmark Global Fund has to say about SAP SE in their Q1 2021 investor letter:

"Finally, SAP is the largest European enterprise software company and the global leader in enterprise resource planning (ERP) software products. Its share price underperformed both the broader market and its software peers over the past year as a result of a revised business strategy, unveiled in October 2020, which called for an accelerated transition to the cloud. This transition will depress near-term revenue and profits as upfront license sales become overtime subscription payments, but long term, this move will increase growth and improve customer economics. This short-term setback gave us an opportunity to invest in one of the most defensive software companies in the market. The company’s recent IPO of a portion of Qualtrics highlights the disconnect between how the market values SAP’s parts compared to its whole. We expect SAP to accelerate to high single-digit, top-line growth over the next five years as the economic benefits of its cloud transition become apparent."


Our calculations show that SAP SE (NYSE: SAP) 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, SAP SE was in 14 hedge fund portfolios compared to 16 funds in the third quarter. SAP delivered a 2.32% 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.