Should You Already Consider Selling Your Cerence (CRNC) Position?

Vulcan Value Partners, an investment management firm, published its “Vulcan Value Partners Small Cap Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. Vulcan’s Small Cap Composite Fund delivered a -0.8% net return for the fourth quarter of 2021, compared to its benchmarks, the Russell 2000 Value Index and Russell 2000 Index which delivered 4.4% and 2.1% returns respectively for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Vulcan Value Partners Small Cap Fund, in its Q4 2021 investor letter, mentioned Cerence Inc. (NASDAQ:CRNC) and discussed its stance on the firm. Founded in 1922, Cerence Inc. (NASDAQ:CRNC) is a Burlington, Massachusetts-based pure-play automotive software company with a $1.4 billion market capitalization, and is currently spearheaded by its CEO, Stefan Ortmanns. Cerence Inc. (NASDAQ:CRNC) delivered a -52.32% return since the beginning of the year, while its 12-month returns are down by -58.96%. The stock closed at $36.54 per share on March 24, 2022.

Here is what Vulcan Value Partners Small Cap Fund has to say about Cerence Inc. (NASDAQ:CRNC) in its Q4 2021 investor letter:

“Cerence Inc. was a material detractor during the quarter. Cerence is a premier provider of automotive voice assistance solutions using speech recognition and natural language understanding. Its technology is installed in over half of vehicles manufactured globally. Two events negatively impacted the company’s stock price during the quarter. First, the global chip shortage caused management to decrease guidance for the upcoming year. Second, Cerence’s CEO, Sanjay Dhawan, unexpectedly announced his resignation, leaving for an early-stage startup. The new CEO, Stefan Ortmanns, has been with the company for 18 years, led the Automotive Division at Nuance Communications before it was spun out as Cerence, and was responsible for 80% of Cerence’s revenue as its Executive Vice President & General Manager. We believe the CEO transition will be seamless, and we have great confidence in the company going forward. Despite near-term disruption due to the chip shortage, its long-term prospects are intact.”

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Our calculations show that Cerence Inc. (NASDAQ:CRNC) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Cerence Inc. (NASDAQ:CRNC) was in 21 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 18 funds in the previous quarter. Cerence Inc. (NASDAQ:CRNC) delivered a -53.70% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Cerence Inc. (NASDAQ:CRNC) in another article. 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.