Here’s Why Cooper Investors Sold its Warner Music (WMG) Stake

Cooper Investors, an investment management firm, published its “Global Equities Fund (Hedged)” first quarter 2022 investor letter – a copy of which can be downloaded here. After a strong 2021, the Fund has endured a tough start to the year, returning -12.45%. In simple terms, the very narrow parts of the market doing well year to date (oil and gas, miners, some banks) are areas in which the fund is underweight, whereas many of the businesses we do own got dragged into a period of indiscriminate selling early in the quarter. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Cooper Investors Global Equities Fund mentioned Warner Music Group Corp. (NASDAQ:WMG) and explained its insights for the company. Founded in 1958, Warner Music Group Corp. (NASDAQ:WMG)  is a New York, New York-based multinational entertainment and record label conglomerate with a $17.9 billion market capitalization. Warner Music Group Corp. (NASDAQ:WMG)  delivered a -19.20% return since the beginning of the year, while its 12-month returns are down by -5.58%. The stock closed at $34.89 per share on April 18, 2022.

Here is what Cooper Investors Global Equities Fund has to say about Warner Music Group Corp. (NASDAQ:WMG) in its Q1 2022 investor letter:

Warner Music was also sold to fund new investments. The business is entering a period of significant capital deployment that is more extensive than we expected, representing a change to our original value propositions. While these investment phases make sense for longer-term strategic positioning, they also raise execution risk and push free cash flow growth further to the right at a time whenother Watchlist stocks have been on sale.”

Music, Studio

Photo by Caught In Joy on Unsplash

Our calculations show that Warner Music Group Corp. (NASDAQ:WMG) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Warner Music Group Corp. (NASDAQ:WMG) was in 38 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 28 funds in the previous quarter. Warner Music Group Corp. (NASDAQ:WMG) delivered a -13.36% return in the past 3 months.

In January 2022, we published an article that includes Warner Music Group Corp. (NASDAQ:WMG) in 10 Best Stocks to Buy For 2022 According to This Hedge Fund Manager. 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.