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Here’s Why Vulcan Value Partners Reduced its Upstart (UPST) Stake

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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 Upstart Holdings, Inc. (NASDAQ:UPST) and explained its insights for the company. Founded in 2012, Upstart Holdings, Inc. (NASDAQ:UPST) is a San Mateo, California-based consumer lending company with a $4.0 billion market capitalization. Upstart Holdings, Inc. (NASDAQ:UPST) delivered a -68.05% return since the beginning of the year, while its 12-month returns are down by -63.63%. The stock closed at $48.34 per share on May 18, 2022.

Here is what Vulcan Value Partners has to say about Upstart Holdings, Inc. (NASDAQ:UPST) in its Q1 2022 investor letter:

"Upstart Holdings Inc. is an artificial intelligence (AI) and cloud-based lending platform. Upstart’s stock price has been very volatile, but its value has grown steadily. Last year, the company grew its revenue by over 250% organically, which materially exceeded our expectations. In addition, the company continues to generate robust free cash flow and is launching new products to expand its business. Upstart’s value has increased consistently since we first purchased it. Following our discipline, we have added to our position when its stock price has declined and its price to value ratio has improved, and we have reduced our stake when its stock price has risen faster than its value."

Photo by Karolina Grabowska from Pexels

Our calculations show that Upstart Holdings, Inc. (NASDAQ:UPST) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Upstart Holdings, Inc. (NASDAQ:UPST) was in 20 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 23 funds in the previous quarter. Upstart Holdings, Inc. (NASDAQ:UPST) delivered a -67.34% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Upstart Holdings, Inc. (NASDAQ:UPST) 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.