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Is Tyler Technologies (TYL) A Smart Long-Term Buy?

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Polen Capital, an investment management firm, published its “Polen U.S. SMID Company Growth Composite” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 2.35% was delivered by the fund for the first quarter of 2021, trailing its Russell 2500 Growth benchmark that delivered a 2.49% gain for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Polen Capital, in its Q1 2021 investor letter, mentioned Tyler Technologies, Inc. (NYSE: TYL), and shared their insights on the company. Tyler Technologies, Inc. is a Plano, Texas-based software company that currently has a $16.5 billion market capitalization. Since the beginning of the year, TYL delivered a -7.20% return, while its 12-month gains are up by 10.98%. As of May 26, 2021, the stock closed at $405.07 per share.

Here is what Polen Capital has to say about Tyler Technologies, Inc. in its Q1 2021 investor letter:

"We added to Tyler Technologies, given our excitement about their announced acquisition of NIC Inc. NIC is a provider of digital solutions to public entities. The company offers a large payment processing business and compliments Tyler's existing business via servicing state and local governments. NIC is a company our team has tracked for many years. We believe that the combination of the two companies will be transformational for Tyler. Additionally, we think the acquisition will unlock many opportunities under Tyler's leadership that would have been harder to access when NIC was independent."

Software
Software

Our calculations show that Tyler Technologies, Inc. (NYSE: TYL) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Tyler Technologies, Inc. was in 28 hedge fund portfolios, compared to 32 funds in the fourth quarter of 2020. TYL delivered a -14.40% 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.

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 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. 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.