Here’s Why Aristotle Capital Exited its Johnson Controls (JCI) Position

Aristotle Capital Management, an independent/employee-owned investment management organization, published its “Aristotle Capital Management Value Equity Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2022, Aristotle Capital’s Value Equity Composite posted a total return of -7.19% gross of fees (-7.26% net of fees), underperforming the -0.74% return of the Russell 1000 Value Index and the -4.60% return of the S&P 500 Index. 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, Aristotle Capital Management Value Equity mentioned Johnson Controls International plc (NYSE:JCI) and explained its insights for the company. Founded in 1885, Johnson Controls International plc (NYSE:JCI) is a Cork, Ireland-based HVAC company with a $35.4 billion market capitalization. Johnson Controls International plc (NYSE:JCI) delivered a -37.34% return since the beginning of the year, while its 12-month returns are down by -21.54%. The stock closed at $50.95 per share on May 24, 2022.

Here is what Aristotle Capital Management Value Equity has to say about Johnson Controls International plc (NYSE:JCI) in its Q1 2022 investor letter:

“As investors since the fourth quarter of 2017, we have enjoyed a front-row view of the large transformation that has taken place at Johnson Controls. Once a multi-industrial corporation, the company successfully turned itself into a pure-play buildings solutions and technology provider. Catalysts we previously identified for Johnson Controls included synergies following its merger with Tyco International, which provides fire safety and building security products, as well as benefits from its separation of non-building-focused businesses, such as automotive seating and batteries. With all catalysts in sight now nearing completion, and Johnson Controls now a better business for it – with higher recurring revenues and lower capital intensity – we decided to exit our investment to help fund the purchases of Xcel Energy and Atmos Energy.”

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Our calculations show that Johnson Controls International plc (NYSE:JCI) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Johnson Controls International plc (NYSE:JCI) was in 44 hedge fund portfolios at the end of the first quarter of 2022, compared to 42 funds in the previous quarter. Johnson Controls International plc (NYSE:JCI) delivered a -21.88% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Johnson Controls International plc (NYSE:JCI) 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.