ClearBridge Investments, an investment management firm, published its “Select Strategy” fourth quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Select Strategy underperformed its Russell 3000 Index benchmark in the fourth quarter. On an absolute basis, the Strategy had gains in eight of the 10 sectors in which it was invested during the quarter (out of 11 sectors total). The industrials and financials sectors were the primary contributors to performance while the communication services and consumer discretionary sectors were detractors. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
ClearBridge Investments Select Strategy, in its Q4 2021 investor letter, mentioned GitLab Inc. (NASDAQ:GTLB) and discussed its stance on the firm. Founded in 2011, GitLab Inc. (NASDAQ:GTLB) is a San Francisco, California-based software company with an $8.4 billion market capitalization, and is currently spearheaded by its CEO, Sid Sijbrandij. GitLab Inc. (NASDAQ:GTLB) delivered a -16.81% return since the beginning of the year, while its 12-month returns are down by -34.15%. The stock closed at $57.29 per share on April 05, 2022.
Here is what ClearBridge Investments Select Strategy has to say about GitLab Inc. (NASDAQ:GTLB) in its Q4 2021 investor letter:
“We attribute this success to our experience following and investing in companies for years in the private markets. This familiarity allows us to model the business out several years to understand the serviceable market, how a company’s product or service will lead to market share dominance, project the potential returns and assess the profitability of the business. We looked at a number of companies in 2021 and questioned whether this product fit existed. In the end, we moved forward with investments in businesses with strong dependable revenue streams with high renewal rates where we believe the end user will return and consume more of the company’s offerings. From a fundamental standpoint, we target companies that are cash flow positive or very close to it and are led by strong, entrepreneurial managements in industries we know and have been successful in such as software, payments, consumer and health care.
Several of the IPOs we participated in during the fourth quarter illustrate these qualities.
Gitlab is a designer of software for a rapidly growing area of IT operations: development, security and operations (Dev/Sec/Ops) for software developers. We started following the company in 2018, did a full due diligence during its last venture round before coming public and became convinced it had a highly recurring and disruptive business with a very long runway for future growth. Gitlab has established a broad platform of software tools required by developers to write code, package it, secure it and deploy it. We see the company as the more innovative in a twohorse race with Github, a division within Microsoft, in the Dev/Sec/Ops market. While the shares came out at a difficult time for high growth disruptors, we believe Gitlab has a compelling secular growth trajectory.”
Photo by Danial Igdery on Unsplash
Our calculations show that GitLab Inc. (NASDAQ:GTLB) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. GitLab Inc. (NASDAQ:GTLB) was in 27 hedge fund portfolios at the end of the fourth quarter of 2021. GitLab Inc. (NASDAQ:GTLB) delivered a 41.11% return in the past 3 months. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
