Ruane, Cunniff & Goldfarb, the investment advisor that manages the Sequoia Fund, has released its fourth quarter 2023 investor letter. You can download a copy of it here. In the fourth quarter, the fund returned 13.31%, compared to a return of 11.69% for the S&P 500. In 2023, the fund returned 27.83%, compared to a return of 26.29% for the index. Additionally, you can check out the fund’s top 5 holdings to find out its top picks in 2023.
Sequoia Fund introduced stocks like SAP SE (NYSE:SAP) in a letter to investors in Q4 2023. Headquartered in Walldorf, Germany, SAP SE (NYSE:SAP) is a provider of software products for enterprise applications. On March 20, 2024, SAP SE (NYSE:SAP) stock closed at $190.38 per share. One month return of SAP SE (NYSE:SAP) was 4.78% and its stock gained 53.85% of its value in last 52 weeks. SAP SE (NYSE:SAP) has a market capitalization of $222.217 billion.
Sequoia Fund stated the following about SAP SE (NYSE:SAP) in its Q4 2023 letter to investors:
“After tracking SAP SE (NYSE:SAP) for many years, we bought shares in the company in 2022. Since we haven’t covered SAP in depth in previous communications, we’ll start with a little background. This German-based company boasts a leading global share of enterprise resource planning (ERP) software, or what might be considered an operating system for large enterprises. This type of software performs key functions for customers related to accounting, manufacturing and supply chain. SAP also sells complementary modules that help customers manage human resources, procurement and costs. For multinational companies that manufacture or move something in the physical world, SAP is pretty much the only game in town. As a result, SAP has retained many of its customers, especially the largest ones, for decades.
A few years ago, SAP began transitioning its core suite of ERP software products from one typically run by users on their premises to a cloud version delivered directly by SAP. Because SAP takes on a much greater degree of responsibility with the delivery of the upgraded product, it can earn significantly more revenue per cloud user. We believe that the transition of SAP’s ERP business to the cloud is likely to lead to a potentially decade-long momentum of accelerated revenue growth. Critically, because SAP’s ERP software is so sticky, migrating to a cloud product is, in our view, much more a matter of when than if for a significant portion of the company’s installed base. We can think of several companies in the world whose products are more important to their customers and/or have higher switching costs…” (Click here to read the full text)
A CEO in a suit presents a large touch screen of the company’s cloud business platform.
SAP SE (NYSE:SAP) is not on our list of the 30 most popular stocks among hedge funds. At the end of the fourth quarter, SAP SE (NYSE:SAP) held 22 hedge fund portfolios, up from 17 in the previous quarter, according to our database.
We discussed SAP SE (NYSE:SAP) in another article and shared a list of European stocks that Jim Cramer likes. Additionally, see our Q4 2023 Hedge Fund Investor Letters page for more letters to hedge fund investors and other leading investors.
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Disclosure: None. This article was originally published on Insider Monkey.