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Why Alarm.Com Holdings (ALRM) Stock is a Compelling Investment Case

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·3 min read
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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 Alarm.Com Holdings Inc. (NASDAQ:ALRM) is one of them. Alarm.Com Holdings Inc. (NASDAQ:ALRM) is a home automation company. Year-to-date, Alarm.Com Holdings Inc. (NASDAQ:ALRM) stock gained 66.4% and on November 11th it had a closing price of $71.50. Here is what Polen Capital said:

"Alarm.com Holdings, a cloud-based home security and automation service provider, was also a top detractor in the period. Interestingly, in some ways, Alarm.com is a beneficiary of the pandemic as more people move to the suburbs and look to secure their assets. On the other hand, the company continues to see some weaknesses in its commercial and international businesses. Despite this, the company has continued to grow throughout the pandemic, which we view as a testament to its durable business model and innovative services. Management has continued to invest in the business from both a product innovation and a sales and marketing standpoint. They expect demand to rebound meaningfully as the economic environment normalizes. We remain enthusiastic about Alarm.com and expect that the value proposition it provides will continue to drive strong results going forward."

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Logitech Circle 2

In Q2 2020, the number of bullish hedge fund positions on Alarm.Com Holdings Inc. (NASDAQ:ALRM) stock increased by about 4% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Alarm.Com's growth potential. Our calculations showed that Alarm.Com Holdings Inc. (NASDAQ:ALRM) 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.