DAVA - White Falcon Capital - Endava: Has The Culture Scale And Competencies To Succeed

2024-04-20 10:40:00 ET

Summary

• Endava detracted ~350 bps from performance this quarter and was down 40% after it reported earnings in February.
• We see a favorable backdrop for businesses like Endava with rising investments in technology, growing trends in outsourcing, and the emergence of new technologies.
• We believe the risk-reward is favorable for an increased allocation to Endava.

The following segment was excerpted from this fund letter.

Endava plc ( DAVA )

Our laggard Endava has detracted ~ 350 bps from performance this quarter. Endava was down 40% after it reported earnings in February. This was a 3% position before this decline, but we have since added to the stock to make it one of the top 5 positions (by cost) in the White Falcon portfolio. Endava is a founder-led IT service provider headquartered in London, UK. It competes with the likes of Accenture ( ACN ) and provides IT services to clients in the financial services, travel, retail, software, healthcare among other industries. We believe scaled IT service providers are good businesses as they are essentially a 'royalty' on IT spend. They are an important link between technology and corporations who increasingly need technology to transform their business. We see a favorable backdrop for businesses like Endava with rising investments in technology, growing trends in outsourcing, and the emergence of new technologies such as Artificial Intelligence ('AI'). Importantly, we believe that Endava has the culture, scale and competencies required to succeed....

For further details see: