Aristotle Capital Management, an independent/employee-owned investment management organization, published its “Global Equity Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2022, Aristotle Capital’s Global Equity Composite posted a total U.S. dollar return of -9.19% gross of fees (-9.28% net of fees), compared to the MSCI World Index, which returned -5.15%, and the MSCI ACWI Index, which returned -5.36%. 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 Global Equity mentioned Lennar Corporation (NYSE:LEN) and explained its insights for the company. Founded in 1954, Lennar Corporation (NYSE:LEN) is a Miami, Florida-based home construction company with a $21.9 billion market capitalization. Lennar Corporation (NYSE:LEN) delivered a -34.81% return since the beginning of the year, while its 12-month returns are down by -23.36%. The stock closed at $75.73 per share on May 25, 2022.
Here is what Aristotle Capital Management Global Equity has to say about Lennar Corporation (NYSE:LEN) in its Q1 2022 investor letter:
“Lennar, one of the nation’s largest homebuilders, was a primary detractor for the quarter. The combination of rising home values and higher mortgage rates in the U.S. has reduced homeownership affordability, causing concern of a slowdown in the housing market. While we recognize higher mortgage rates reduce affordability, we also recognize there is a supply deficit caused by nearly 10 years of new home construction lagging demand. Despite rising construction and land costs, Lennar’s profitability has increased, with the company’s year-over-year home sales gross margin expanding 190 basis points to 26.9%. First-quarter new orders and home deliveries also exceeded management’s expectations, and the firm raised its home delivery target for fiscal year 2022. With increased FREE cash flow as both margins and volume increased, Lennar continued to buy back shares, and the Board approved a 50% increase in the annual dividend, as well as an additional $2 billion stock repurchase authorization (over 8% of the current market cap). Lennar’s conservative capital allocation and prudent inventory management have allowed, and we believe will continue to allow, the company to overcome higher interest rates.”
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Our calculations show that Lennar Corporation (NYSE:LEN) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Lennar Corporation (NYSE:LEN) was in 50 hedge fund portfolios at the end of the first quarter of 2022, compared to 52 funds in the previous quarter. Lennar Corporation (NYSE:LEN) delivered a -8.02% return in the past 3 months. 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.
