Vulcan Value Partners, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. All five of the fund’s strategies trailed their respective benchmarks during the quarter. According to the fund, they ‘place no weight on short-term results, good or bad, and neither should you’. Vulcan Value Partners have made and will continue to make decisions that negatively impact short-term performance when it thinks it can improve its long-term returns and lower risk. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Vulcan Value Partners mentioned AppLovin Corporation (NASDAQ:APP) and explained its insights for the company. Founded in 2012, AppLovin Corporation (NASDAQ:APP) is a Palo Alto, California-based mobile technology company with a $13.7 billion market capitalization. AppLovin Corporation (NASDAQ:APP) delivered a -61.28% return since the beginning of the year, while its 12-month returns are down by -43.51%. The stock closed at $36.50 per share on May 18, 2022.
Here is what Vulcan Value Partners has to say about AppLovin Corporation (NASDAQ:APP) in its Q1 2022 investor letter:
“AppLovin Corp was a material detractor during the quarter. AppLovin Corp. owns a portfolio of over 350 mobile games and operates a software platform that enables third-party gaming apps to advertise and monetize effectively. The two segments create a mutually beneficial relationship. AppLovin collects and uses data gathered from its own portfolio of gaming apps to enhance the ad placement capabilities of its software platform. AppLovin recently acquired Twitter’s MoPub monetization platform at a very attractive price, which will provide additional scale. The stock traded down after earnings due to weaker than expected guidance in the owned games segment and increased spending on new growth initiatives. However, software platform revenue is expected to increase at a high double-digit rate in its fiscal year 2022. Moreover, software is the company’s most profitable business with an 80% contribution margin. Shortly after earnings, the company announced a $750 million share repurchase authorization which we think is an excellent capital allocation decision.”
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Our calculations show that AppLovin Corporation (NASDAQ:APP) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. AppLovin Corporation (NASDAQ:APP) was in 31 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 24 funds in the previous quarter. AppLovin Corporation (NASDAQ:APP) delivered a -46.88% return in the past 3 months.
In March 2022, we also shared another hedge fund’s views on AppLovin Corporation (NASDAQ:APP) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
