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Is it a Wise Choice to Invest in CBRE Group?

·2 min read

Vulcan Value Partners, an investment management firm, published its second-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. The good news is that across its portfolios most of its companies are performing well fundamentally. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Vulcan Value Partners mentioned CBRE Group, Inc. (NYSE:CBRE) and explained its insights for the company. Founded in 1906, CBRE Group, Inc. (NYSE:CBRE) is a Dallas, Texas-based commercial real estate services and investment firm with a $25.8 billion market capitalization. CBRE Group, Inc. (NYSE:CBRE) delivered a -25.88% return since the beginning of the year, while its 12-month returns are down by -15.89%. The stock closed at $80.43 per share on August 26, 2022.

Here is whatVulcan Value Partners has to say about CBRE Group, Inc. (NYSE:CBRE) in its Q2 2022 investor letter:

"We purchased CBRE Group Inc. (NYSE:CBRE) and Jones Lang LaSalle (NYSE:JLL) during the quarter, both of which have been successful investments for us in the past. CBRE and Jones Lang LaSalle are two of the largest commercial real estate services companies offering comprehensive real estate services globally. The companies serve real estate investors and corporate occupiers of real estate by providing leasing, brokerage, M&A and investment advisory, as well as property and facility management services.

To complement their core offerings, they also have large global real estate investment management businesses with steady recurring fees. The industry is highly fragmented. Industry consolidation has been occurring for decades, and we believe CBRE and Jones Lang LaSalle will continue to take market share. Both companies’ revenues are diversified by geography, asset class and service lines.

Additionally, CBRE and Jones Lang LaSalle have inherently variable cost structures. Neither company owns any real estate, which provides the flexibility to adjust costs when the macro environment becomes less favorable. The combination of declining share prices and stable values provided an opportunity to purchase two outstanding companies at a discount to their intrinsic values."


STUDIO GRAND OUEST/Shutterstock.com

Our calculations show that CBRE Group, Inc. (NYSE:CBRE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. CBRE Group, Inc. (NYSE:CBRE) was in 42 hedge fund portfolios at the end of the second quarter of 2022, compared to 55 funds in the previous quarter. CBRE Group, Inc. (NYSE:CBRE) delivered a -4.31% return in the past 3 months.

In May 2022, we also shared another hedge fund’s views on CBRE Group, Inc. (NYSE:CBRE) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

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