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 Splunk Inc. (NASDAQ:SPLK) and explained its insights for the company. Founded in 2003, Splunk Inc. (NASDAQ:SPLK) is a San Francisco, California-based software company with a $15.3 billion market capitalization. Splunk Inc. (NASDAQ:SPLK) delivered a -17.32% return since the beginning of the year, while its 12-month returns are down by -15.35%. The stock closed at $95.68 per share on May 18, 2022.
Here is what Vulcan Value Partners has to say about Splunk Inc. (NASDAQ:SPLK) in its Q1 2022 investor letter:
“Splunk Inc. was a material contributor during the quarter. Splunk is a software company that provides solutions using data from digital systems to enable its customers to identify ways to increase efficiencies in real time. Splunk has the ability to incorporate unstructured data that resides both within a customer’s on-premise servers and in the cloud and present the takeaways from that data in an easy to understand way that doesn’t require the customer to be a data scientist. There were a number of positive developments during the quarter. In February, it was reported that Cisco was interested in acquiring Splunk. Although neither company commented on the potential acquisition, this news called attention to Splunk’s value as a company. Additionally, the company reported better than expected fourth quarter results including solid growth, improved free cash flow, and strong margin guidance for the upcoming year. Also, Splunk announced that Gary Steele will become the new CEO. Gary was the founder and CEO of Proofpoint, an enterprise security company, and he led the company for twenty years before selling it last year. For the fourth quarter, Splunk reported good results with solid growth and guidance. Perhaps most importantly, commentary around margin improvement and free cash flow expansion came in much better than expected, suggesting the company will make a lot of progress this year and the next couple of years driving profitable growth. Over the long term, we are confident in its prospects as Splunk holds a solid competitive position in a large and growing market. The company’s margins are increasing, and we believe its long-term prospects remain strong.”
Our calculations show that Splunk Inc. (NASDAQ:SPLK) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Splunk Inc. (NASDAQ:SPLK) was in 44 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 47 funds in the previous quarter. Splunk Inc. (NASDAQ:SPLK) delivered a -17.32% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on Splunk Inc. (NASDAQ:SPLK) 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.
