Is Cerence Inc. (CRNC) A Smart Long-Term Buy?

Bernzott Capital Advisors, an investment management firm, published its fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 24.41% was recorded by the fund in the fourth quarter of 2020, below its  R2000V and R2500V benchmarks that delivered a 33.36% and 28.51% return respectively in 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 Q4 2020 investor letter, mentioned Cerence Inc. (NASDAQ: CRNC) and emphasized their views on the company. Cerence Inc. is a Burlington, Massachusetts-based software company that currently has a $3.8 billion market capitalization. Since the beginning of the year, CRNC delivered a -0.68% return, while its 12-month gains are impressively up by 482.94%. As of March 23, 2021, the stock closed at $99.80 per share.

Here is what Bernzott Capital Advisors has to say about Cerence Inc. in their Q4 2020 investor letter:

“Cerence (CRNC): A provider of speech recognition and voice technologies for automotive applications, reported another in a string of strong earnings reports this year. In addition to impressive bottom line results, bookings rose 70%, and its pipeline was up more than 2x compared to last year despite challenging auto market conditions. A promising new product outlook helped support the stock’s advance.”

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 -8.51% return in the past 3 months.