Artisan Partners, a high value-added investment management firm, published its ‘Artisan Mid Cap Fund’ second quarter 2021 investor letter – a copy of which can be downloaded here. A return of 10.45% was recorded by its Investor Class: ARTMX, 10.46% by its Advisor Class: APDMX, and 10.52% by its Institutional Class: APHMX, in the second quarter of 2021, all below the Russell Midcap® Growth Index that delivered an 11.07% return, but outperforming the Russell Midcap® Index that was up by 7.50% for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Artisan Partners, the fund mentioned Entegris, Inc. (NASDAQ: ENTG) and discussed its stance on the firm. Entegris, Inc. is a Billerica, Massachusetts-based manufacturing company with a $16.4 billion market capitalization. ENTG delivered a 26.53% return since the beginning of the year, while its 12-month returns are up by 82.75%. The stock closed at $121.07 per share on September 2, 2021.
Here is what Artisan Partners has to say about Entegris, Inc. in its Q2 2021 investor letter:
“Entegris is one of the largest suppliers of advanced materials (high purity gases/chemicals) and filtration systems used in semiconductor manufacturing. The industry’s incredibly complex production environment is getting increasingly onerous—more process steps, greater purity requirements—which is driving higher demand for Entegris’ products and systems. Furthermore, rising chip content across a broad swath of industries (industrial, auto, communications, consumer) to enable new technological advances (5G, AI/ML, cloud, EV’s, autonomous vehicles) has driven semiconductor wafer production growth to ~6% annually. Given this backdrop, we believe the company is well-positioned for a solid profit cycle ahead.”
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Based on our calculations, Entegris, Inc. (NASDAQ: ENTG) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. ENTG was in 25 hedge fund portfolios at the end of the first half of 2021, compared to 23 funds in the previous quarter. Entegris, Inc. (NASDAQ: ENTG) delivered a 4.59% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
