Here’s Why Bernzott Capital Sold its Cerence Inc. (CRNC) Position

Bernzott Capital Advisors, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A net return of 10.27% was recorded by the fund for the Q1 of 2021, below the Russell 2000 Value and Russell 2500 Value Index that delivered a 21.17% and 16.83% returns respectively for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Bernzott Capital Advisors, in their Q1 2021 investor letter, mentioned Cerence Inc. (NASDAQ: CRNC), and shared their insights on the company. Cerence Inc. is a Burlington, Massachusetts-based software company that currently has a $3.5billion market capitalization. Since the beginning of the year, CRNC delivered a -7.20% return, while its 12-month gains are up by 327.16%. As of May 05, 2021, the stock closed at $93.25 per share.

Here is what Bernzott Capital Advisors has to say about Cerence Inc. in their Q1 2021 investor letter:

“Cerence (CRNC): A provider of speech recognition and voice technologies for automotive applications reported a string of very strong financial results in 2020 and the stock responded accordingly. The stock reached our estimate of fair value and we exited the position with a significant gain, as the stock more than tripled.”

Our calculations show that Cerence Inc. (NASDAQ: CRNC) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Cerence Inc. was in 14 hedge fund portfolios, compared to 12 funds in the third quarter. CRNC delivered a -21.43% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.