Do You Think Guidewire Software (GWRE) is at an Inflection Point?
Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In Q2, data indicated strong US economic activity and a robust labor market, while inflation gradually moved closer to the Fed’s 2% target. In the second quarter, its Investor Class fund ARTSX returned -4.45%, Advisor Class fund APDSX posted a return of -4.40%, and Institutional Class fund APHSX returned -4.38%, compared to a return of -2.92% for the Russell 2000 Growth Index. From a sector standpoint, the underperformance was due to negative security selection, while the impact of allocation was slightly positive. In addition, you can check the fund's top 5 holdings to find out its best picks for 2024.
Artisan Small Cap Fund highlighted stocks like Guidewire Software, Inc. (NYSE:GWRE) in its Q2 2024 investor letter. Guidewire Software, Inc. (NYSE:GWRE) offers a platform for property and casualty (P&C) insurers. The one-month return of Guidewire Software, Inc. (NYSE:GWRE) was 7.14%, and its shares gained 75.57% of their value over the last 52 weeks. On July 26, 2024, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $148.01 per share with a market capitalization of $12.333 billion.
Artisan Small Cap Fund stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its Q2 2024 investor letter:
"Among our top Q2 contributors were Twist Bioservices and Guidewire Software, Inc. (NYSE:GWRE). Guidewire is a market leader in next-generation software for the property and casualty (P&C) insurance industry. The company's software enhances modern underwriting and claims operations by supporting workflows, external collaboration and rule-based decision-making. It recently transitioned away from a licensed software business model to a subscription-based cloud service. We have seen these cloud subscription transitions before—they involve sacrificing near-term profitability for higher and more predictable long-term cash flows. As companies emerge from these (often messy) transitions, their profit growth tends to accelerate. We believe Guidewire is at this inflection point. In an environment that has generally been challenging for software, the company posted strong earnings results, including annual recurring revenue growth of 15%, the signing of eight new cloud deals and an increase in forward guidance."
An insurance adjuster reviewing images and paperwork to process a claim.
Guidewire Software, Inc. (NYSE:GWRE) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Guidewire Software, Inc. (NYSE:GWRE) at the end of the first quarter which was 33 in the previous quarter. While we acknowledge the potential of Guidewire Software, Inc. (NYSE:GWRE) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Guidewire Software, Inc. (NYSE:GWRE) and shared the list of stocks you should not buy according to Jim Cramer. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.