Here’s Why ClearBridge Investments Exited its VMware (VMW) Position

ClearBridge Investments, an investment management firm, published its “Large Cap Growth Strategy” third quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Large Cap Growth Strategy underperformed its Russell 1000 Growth Index benchmark during the third quarter. On an absolute basis, the Strategy had gains across four of the eight sectors in which it was invested (out of 11 sectors total). The leading contributors to performance were in the IT and health care sectors, while the consumer discretionary and industrials sectors were detractors. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

ClearBridge Large Cap Growth Strategy, in its Q3 2021 investor letter, mentioned VMware, Inc. (NYSE: VMW) and discussed its stance on the firm. VMware, Inc. is a Palo Alto, California-based cloud computing company with a $50.5 billion market capitalization. VMW delivered a 3.95% return since the beginning of the year, while its 12-month returns are down by -15.68%. The stock closed at $120.46 per share on January 07, 2022.

Here is what ClearBridge Large Cap Growth Strategy has to say about VMware, Inc.  in its Q3 2021 investor letter:

“To make room for Netflix and better concentrate the Strategy in our highest-conviction names, we exited positions in software makers VMware. VMware, best known for its system visualization software, is in the earlier stages of an on-premise to cloud transition that could add volatility to growth and cash flow in coming years. At the same time, the company also recently announced several key leadership changes and will have higher financial leverage following the upcoming spinoff from Dell — expected in the fourth quarter.”

Based on our calculations, VMware, Inc. (NYSE: VMW) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. VMW was in 31 hedge fund portfolios at the end of the third quarter of 2021, compared to 28 funds in the previous quarter. VMware, Inc. (NYSE: VMW) delivered a -18.51% return in the past 3 months.

In November 2021, we published an article that includes VMW in the 11 Best Blockchain Stocks to Buy You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

Disclosure: None. This article is originally published at Insider Monkey.