Polen Capital, an investment management company, released its “Polen US SMID Company Growth Strategy” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. SMID cap stocks initially rose by more than 10% following November’s U.S. Presidential election, in another volatile quarter. However, they relinquished nearly all of those gains in December, as the U.S. Federal Reserve signaled that interest rate cuts would occur more slowly than anticipated, with reductions expected to start in 2025. Against this backdrop, the fund returned 3.0% gross, and 2.7% net of fees compared to the Russell 2500 Growth Index return of 2.4%. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Polen US SMID Company Growth Strategy highlighted stocks like Bentley Systems, Incorporated (NASDAQ:BSY) in its Q4 2024 investor letter. Bentley Systems, Incorporated (NASDAQ:BSY) is an infrastructure engineering software solutions provider. The one-month return of Bentley Systems, Incorporated (NASDAQ:BSY) was -0.68%, and its shares lost 8.04% of their value over the last 52 weeks. On January 31, 2024, Bentley Systems, Incorporated (NASDAQ:BSY) stock closed at $46.55 per share with a market capitalization of $14.07 billion.
Polen US SMID Company Growth Strategy stated the following regarding Bentley Systems, Incorporated (NASDAQ:BSY) in its Q4 2024 investor letter:
“Bentley Systems, Incorporated (NASDAQ:BSY) is a long-established leader in infrastructure engineering software—specifically horizontal infrastructure networks such as roads, bridges, rail and transit, water and wastewater, utility grids, and the resources sector. Over 40 years, Bentley has developed comprehensive solutions for infrastructure engineering, covering all aspects of a project lifecycle. The company is actively extending its moat by investing in new technologies like digital twins (virtual models of a physical object, process, or system that uses real-time data to simulate its behavior in the real world) and AI to enhance its offerings and address the growing demand for infrastructure and asset intelligence. Bentley only went public in late 2020 but has a long track record as a classic compounder, achieving a +8% CAGR (Compound Annual Growth Rate) in total revenues over more than 20 years. Bentley boasts high and expanding operating and free cash flow margins, a resilient balance sheet, robust returns on capital, and a highly recurring revenue model. We believe we are paying a fair FCF (free cash flow) multiple for a mission-critical, stable business benefitting from several secular tailwinds and guided by an aligned, long-term-oriented management team.”
