Should You Consider Investing in Salesforce.com (CRM)?

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Oakmark Funds, an investment management firm, published its “Oakmark Equity and Income Fund” first quarter 2021 investor letter – a copy of which can be seen here. A return of 10.3% was reported by the fund for the Q1 of 2021, outperforming its Lipper Balanced Fund benchmark that delivered a 5.4% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Oakmark Equity and Income Fund, in their Q1 2021 investor letter, mentioned salesforce.com, inc. (NYSE: CRM) and shared their insights on the company. salesforce.com, inc. is a San Francisco, California-based software company that currently has a $210.6 billion market capitalization. Since the beginning of the year, CRM delivered a 2.80% return, extending its 12-month gains to 45.05%. As of April 12, 2021, the stock closed at $228.76 per share.

Here is what Oakmark Equity and Income Fund has to say about salesforce.com, inc. in their Q1 2021 investor letter:

“Salesforce was the final new portfolio addition. The company is executing a tried-and-true strategy in the software space of buying young, best-of-breed software companies and then driving these products into their massive installed base. Companies like Tableau, ExactTarget and Mulesoft have considerably more reach in the hands of Salesforce than they could have achieved as standalone companies. However, when Salesforce announced a deal to buy Slack Technologies, the market reduced Salesforce’s pre-announcement market capitalization by roughly $40 billion, effectively offering investors the opportunity to get Slack for free. We believe management should be given the benefit of the doubt. Slack has the potential to be a game-changing technology with a huge addressable market, and management’s track record on acquisitions has been superb. We estimate that the company’s shares now trade at a material discount to industry peer Microsoft, despite showing nearly twice the growth, giving investors the chance to own a top-tier software company at a bottom-tier multiple.”

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Our calculations show that salesforce.com, inc. (NYSE: CRM) ranks 24th in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, salesforce.com, inc. was in 97 hedge fund portfolios, compared to 106 funds in the third quarter. CRM delivered a 6.14% 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.