Here’s Why Guidewire Software (GWRE) Landed in Wasatch Global’s Detractor List

Jose Karlo Mari Tottoc
·3 min read

Wasatch Global Investors, an investment management firm, published its “Wasatch Core Growth Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 5.59% was recorded by the fund for the Q1 of 2021, trailing the benchmark, Russell 2000 Index, that increased 12.70% and the Russell 2000 Growth Index that rose 4.88% for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Wasatch Global Investors, in its Q1 2021 investor letter, mentioned Guidewire Software, Inc. (NYSE: GWRE), and shared their insights on the company. Guidewire Software, Inc. is a San Mateo, California-based software company that currently has an $8.2 billion market capitalization. Since the beginning of the year, GWRE delivered a -23.33% return, while its 12-month gains are up by 1.76%. As of May 07, 2021, the stock closed at $98.70 per share.

Here is what Wasatch Global Investors has to say about Guidewire Software, Inc. in its Q1 2021 investor letter:

"Guidewire Software, Inc. (GWRE) was another large detractor. The company provides enterprise software for the property and casualty insurance industry. The software supports collaborative workflow, cooperation with external partners and rule-based decision making—all of which characterize modern underwriting and claims operations. Guidewire’s InsuranceSuite platform allows insurance-industry customers to manage claims, policies and billing functions. Other modules can be added to assist in data management, analytics and digital engagement. We believe Guidewire will eventually be well-positioned to benefit as insurance companies increasingly replace their core (usually on-premises) legacy software with centralized, cloud-based offerings. In the shortterm, however, Guidewire has seen some challenges with its move to the cloud. We think these challenges, along with the broad correction among technology names, accounted for the stock-price decline."

Software
Software

Our calculations show that Guidewire Software, Inc. (NYSE: GWRE) 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, Guidewire Software, Inc. was in 35 hedge fund portfolios compared to 34 funds in the third quarter. GWRE delivered a -20.21% 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.