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Here’s Why Aristotle Capital Disposed its Axalta (AXTA) Shares

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Aristotle Capital Management, an independent/employee-owned investment management organization, published its “Global Equity Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2022, Aristotle Capital's Global Equity Composite posted a total U.S. dollar return of -9.19% gross of fees (-9.28% net of fees), compared to the MSCI World Index, which returned -5.15%, and the MSCI ACWI Index, which returned -5.36%. 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, Aristotle Capital Management Global Equity mentioned Axalta Coating Systems Ltd. (NYSE:AXTA) and explained its insights for the company. Founded in (year founded), Axalta Coating Systems Ltd. (NYSE:AXTA) is a Philadelphia, Pennsylvania-based chemical industry company with a $5.7 billion market capitalization. Axalta Coating Systems Ltd. (NYSE:AXTA) delivered a -21.89% return since the beginning of the year, while its 12-month returns are down by -18.00%. The stock closed at $25.87 per share on May 25, 2022.

Here is what Aristotle Capital Management Global Equity has to say about Axalta Coating Systems Ltd. (NYSE:AXTA) in its Q1 2022 investor letter:

"We became owners of Axalta, a coatings provider primarily to the auto industry, in the third quarter of 2016. During our more than five-year holding period, the company has successfully enhanced its FREE cash flow through cost reductions and low requirements of maintenance capital expenditures. It has used this cash to, in part, participate in further industry consolidation. The company has battled supply chain headwinds in recent years, but we still think highly of Axalta's competitive advantages, which include its scale, pricing power and strong OEM relationships. However, we decided Axalta was the best candidate for sale to fund what we believe is a more attractive investment in FMC. In addition, given this quarter's purchase of Michelin, we thought it prudent to balance our exposure to the auto industry."

Pixabay/Public Domain

Our calculations show that Axalta Coating Systems Ltd. (NYSE:AXTA) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Axalta Coating Systems Ltd. (NYSE:AXTA) was in 39 hedge fund portfolios at the end of the first quarter of 2022, compared to 37 funds in the previous quarter. Axalta Coating Systems Ltd. (NYSE:AXTA) delivered a -6.47% return in the past 3 months.

In April 2022, we published an article that includes Axalta Coating Systems Ltd. (NYSE:AXTA) in 5 Stocks in the Spotlight Following First-Quarter Results. 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.