Vulcan Value Partners Sold CoStar Group (CSGP) Due to Poor Capital Allocation

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Soumya Eswaran

Wed, April 22, 2026 astatine 8:13 AM CDT 3 min read

Investment absorption company Vulcan Value Partners recently released its first-quarter 2026 capitalist letter. A transcript of the missive tin beryllium downloaded here. The steadfast focuses connected improving semipermanent returns and lowering hazard implicit short-term results. In the quarter, the Large Cap Composite (Net) returned -14.1%, the Small Cap Composite (Net) returned -6.8%, the Focus Composite (Net) returned -19.1%, the Focus Plus Composite (Net) returned -19.1% arsenic good arsenic the All-Cap Composite (Net) returned -13.5%. Throughout 2025 and escalating to the archetypal 4th of 2026, the marketplace is experiencing heightened volatility related to AI's potential, starring to mispricing of immoderate beardown companies. The existent marketplace turbulence presents opportunities for semipermanent investors consenting to judge short-term volatility successful stable-valued companies and amended the borderline of safety. The missive identified businesses into 3 groups with perceived /real AI disruption risk: Software, Alternative Asset Managers, and indirectly impacted businesses. The steadfast highlights that its concern strategy aims to leverage this volatility to trim hazard and summation returns successful the agelong term. In addition, delight cheque the Firm’s apical 5 holdings to cognize its champion picks successful 2026.

In its first-quarter 2026 capitalist letter, Vulcan Value Partners highlighted stocks similar CoStar Group, Inc. (NASDAQ:CSGP). CoStar Group, Inc. (NASDAQ:CSGP) is an information, analytics, and online marketplace services supplier for commercialized and residential spot markets. On April 21, 2026, CoStar Group, Inc. (NASDAQ:CSGP) closed astatine $38.91 per share. One-month instrumentality of CoStar Group, Inc. (NASDAQ:CSGP) was -6.04%, and its shares mislaid 52.45% implicit the past 52 weeks. CoStar Group, Inc. (NASDAQ:CSGP) has a marketplace capitalization of $16.49 billion.

Vulcan Value Partners stated the pursuing regarding CoStar Group, Inc. (NASDAQ:CSGP) successful its Q1 2026 capitalist letter:

"CoStar Group, Inc. (NASDAQ:CSGP) is simply a premier accusation services supplier to the commercialized and residential existent property industries. Its halfway businesses are dominant, person precocious barriers to entry, nutrient copious amounts of escaped currency flow, and historically person grown astatine a treble digit rate. We bought CoStar due to the fact that of these businesses. Several years ago, aft we purchased CoStar, the institution bought Homes.com. They person taken virtually each of the company’s escaped currency travel and reinvested it into Homes.com successful an effort to disrupt the residential brokerage portal industry. Stated simply, it has not worked and the institution continues to reinvest virtually each of its escaped currency travel into Homes.com, which absorption present says volition not beryllium profitable until 2030, 8 years aft it launched the business. We nary longer suffice CoStar Group for concern due to the fact that of mediocre superior allocation. Following our subject we sold it to reallocate superior into much discounted companies with amended absorption teams."

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