Aristotle Capital Management, an independent/employee-owned investment management organization, published its “Aristotle Core Equity” first quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2022, Aristotle Atlantic’s Core Equity Composite posted a total return of -6.79% gross of fees (-6.89% net of fees), underperforming the S&P 500 Index, which recorded a total return of -4.60%. 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 Core Equity Fund mentioned Spirit AeroSystems Holdings, Inc. (NYSE:SPR) and explained its insights for the company. Founded in 2005, AeroSystems Holdings, Inc. (NYSE:SPR) is a Wichita, Kansas-based aerostructure manufacturer with a $3.3 billion market capitalization. AeroSystems Holdings, Inc. (NYSE:SPR) delivered a -25.71% return since the beginning of the year, while its 12-month returns are down by -34.95%. The stock closed at $32.01 per share on May 27, 2022.
Here is what Aristotle Capital Management Small Cap Equity has to say about AeroSystems Holdings, Inc. (NYSE:SPR) in its Q1 2022 investor letter:
“Spirit AeroSystems is a supplier of aerostructures to several aerospace and defense (A&D) companies, including Boeing, which is its largest customer. The company supplies fuselages, propulsion systems and wings for A&D companies. We expect Spirit to benefit from a recovery in aircraft production which was significantly curtailed over the past few years because of Boeing’s delayed recertification of the 737 MAX, following two major airline crashes. The airline and aerospace industries were also negatively impacted by the coronavirus pandemic, as both travel demand was curtailed and various governments restricted travel by their citizens. Spirit is focused on improving its margins. The company’s mix of aircraft production should organically increase as a result of more 737 MAX production in the mix. The 737 MAX is Spirit’s most profitable product. Meanwhile, a reduction in 787 MAX production also helps the company’s margin, since Spirit loses money on this program. The company is also automating its manufacturing processes in its factories which should help margins. We expect an improvement in the balance sheet, as profitability improves, and deliveries of aircraft reduce the amount of inventory on the balance sheet. The company produced positive free cash flow in its most recent reported quarter. Consensus earnings estimates are $2.78 and $5.35 for fiscal years 2023 and 2024, respectively. Earnings revisions for 2023 and 2024 appear to have bottomed and begun increasing modestly.”
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Our calculations show that AeroSystems Holdings, Inc. (NYSE:SPR) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. AeroSystems Holdings, Inc. (NYSE:SPR) was in 52 hedge fund portfolios at the end of the first quarter of 2022, compared to 45 funds in the previous quarter. AeroSystems Holdings, Inc. (NYSE:SPR) delivered a -35.98% 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.
