Artisan Partners, an investment management company, released its “Artisan Value Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. In the second quarter, its Investor Class fund ARTLX returned -13.40%, Advisor Class fund APDLX posted a return of -13.32%, and Institutional Class fund APHLX returned -13.32%, compared to a return of -12.21% for the Russell 1000 Value Index. Poor performance of the communications and health care sectors impacted the fund’s performance in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Artisan Partners discussed stocks like Bank of America Corporation (NYSE:BAC) in the second quarter investor letter. Based in Charlotte, North Carolina, Bank of America Corporation (NYSE:BAC) is a banking and financial services company. On September 26, 2022, Bank of America Corporation (NYSE:BAC) stock closed at $31.03 per share. One-month return of Bank of America Corporation (NYSE:BAC) was -8.98% and its shares lost 28.10% of their value over the last 52 weeks. Bank of America Corporation (NYSE:BAC) has a market capitalization of $249.333 billion.
Here is what Artisan Partners specifically said about Bank of America Corporation (NYSE:BAC) in its Q2 2022 investor letter:
“We made only one new purchase during the quarter, initiating a position in Bank of America (BAC). As one of America’s largest banks, Bank of America Corporation (NYSE:BAC) is second only to JPMorgan Chase (JPM) in size and is probably its closest peer. Both are well-run banks, but compared to JPM, since the GFC, BAC has retired more shares, grown EPS faster and currently has more capital and a lower dividend payout. We are attracted to BAC’s strong capital base, high capital generation capacity, large loan loss reserve, low (~50%) loan/deposit ratio, short duration investment securities book, and low dividend payout that provides financial flexibility. BAC has a less volatile earnings stream than JPM with lower capital market sensitive exposures. Additionally, BAC is rigorously stress tested by the Fed every year in quantitative and qualitative fashion. Warren Buffett’s Berkshire Hathaway, which we hold in the portfolio, owns 12% of BAC. He petitioned the Fed to own more than 10%, so he clearly likes it. Bank stocks were strong gainers in 2021 on the prospects of higher rates boosting net interest margins, but the stocks pulled back in the first half of 2022 on economic concerns. We believe BAC has massive scale advantages, should benefit from increasing interest rates, particularly in the 2-year part of the yield curve, and should grow over time with the economy. The economic environment is highly uncertain, but current consensus includes the provision for losses more than doubling and capital markets activity slowing. Against that backdrop, our purchase price equated to about 8.5X our estimates of “mid-cycle” earnings. With leading businesses, a double-digit ROE, a prudent capital return strategy and a strong balance sheet, we believe this entry point offered a solid long-term value.”
Bank of America Corporation (NYSE:BAC) is in 15th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 99 hedge fund portfolios held Bank of America Corporation (NYSE:BAC) at the end of the second quarter which was 99 in the previous quarter.
We discussed Bank of America Corporation (NYSE:BAC) in another article and shared the best stocks to invest in. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.