ClearBridge Investments’ Biggest Detractor: Century Communities (CCS)

ClearBridge Investments, an investment management firm, published its “Small Cap Strategy” first quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Small Cap Strategy outperformed its Russell 2000 Index benchmark during the first quarter. On an absolute basis, the Strategy had losses across six of the 11 sectors in which it was invested during the quarter. The leading detractors were the consumer discretionary, IT, and financial sectors, while the leading contributors were the energy and health care sectors. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Clearbridge Investments Small Cap Strategy mentioned Century Communities, Inc. (NYSE:CCS) and explained its insights for the company. Founded in 2002, Century Communities, Inc. (NYSE:CCS)  is a Colorado-based homebuilder company with a $1.6 billion market capitalization. Century Communities, Inc. (NYSE:CCS)  delivered a -37.85% return since the beginning of the year, while its 12-month returns are down by -22.36%. The stock closed at $50.83 per share on April 14, 2022.

Here is what Clearbridge Investments Small Cap Strategy has to say about Century Communities, Inc. (NYSE:CCS) in its Q1 2022 investor letter:

“However, this transition to a higher cost of capital has not been universally beneficial. Our biggest detractor in the quarter was Century Communities (NYSE:CCS), a home builder whose stock price was subjected to inflation from labor and raw materials as well as concerns over whether the strong current demand for homes will persist as mortgage rates rise. While inflation is certainly a concern, the fact that home prices are at historic highs affords homebuilders the latitude to pass these increases through to homebuyers. We also believe demand from those looking to buy a home and obtain a mortgage will continue to persist despite rising rates, especially as inflation results in rising rents. We believe the housing cycle is far from over and have strong conviction in Century Communities.”

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Our calculations show that Century Communities, Inc. (NYSE:CCS) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Century Communities, Inc. (NYSE:CCS) was in 20 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 21 funds in the previous quarter. Century Communities, Inc. (NYSE:CCS) delivered a -31.61% return in the past 3 months.

In March 2022, we published an article that includes Century Communities, Inc. (NYSE:CCS) 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.