Vulcan Value Partners: “Cerence (CRNC)’s Competitive Moat Remains Unchanged”

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 Cerence Inc. (NASDAQ:CRNC) and explained its insights for the company. Founded in 2019, Cerence Inc. (NASDAQ:CRNC) is a Burlington, Massachusetts-based multinational software company with a $1.1 billion market capitalization. Cerence Inc. (NASDAQ:CRNC) delivered a -61.12% return since the beginning of the year, while its 12-month returns are down by -64.04%. The stock closed at $29.80 per share on May 18, 2022.

Here is what Vulcan Value Partners has to say about Cerence Inc. (NASDAQ:CRNC) in its Q1 2022 investor letter:

“Cerence Inc. 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. A number of events have negatively affected the stock price over the past several months. Global supply chain shortages have impacted automobile production, the company’s CEO unexpectedly resigned, and the new CEO, Stefan Ortmanns, lowered guidance. These developments have been disappointing; however, we believe Cerence’s competitive moat remains unchanged. As the automobile supply chains begin to normalize, we expect growth to return to pre-Covid levels.”

Our calculations show that Cerence Inc. (NASDAQ:CRNC) fell short and didn’t make it 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 -28.54% return in the past 3 months.

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