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 Ingersoll Rand Inc. (NYSE: IR) and discussed its stance on the firm. Ingersoll Rand Inc. is a Davidson, North Carolina-based industrial equipment provider with a $21.6 billion market capitalization. IR delivered a 17.53% return since the beginning of the year, while its 12-month returns are up by 51.64%. The stock closed at $53.79per share on September 2, 2021.
Here is what Artisan Partners has to say about Ingersoll Rand Inc. in its Q2 2021 investor letter:
“Ingersoll Rand is a global market leader with a broad range of missioncritical flow creation technologies (pumps, compressors, etc.) for industrial and medical applications. Over the past several years of our investment campaign, we have witnessed a new management team reposition the company toward less cyclical, more profitable businesses, which are supported by a stronger culture of employee engagement and continuous improvement. More recently, the company’s top-line growth has accelerated as the pandemic fades, and margins are benefiting from cost synergies achieved in its merger integration with Gardner Denver. This has boosted cash flows and enabled management to resume its successful bolt-on acquisition strategy, acquiring Seepex GmbH, a global leader in positive displacement pumps for end markets such as water, wastewater, food and beverage and chemicals, in Q2. With an increasingly visible organic and acquisition-driven growth capability, characteristics the market appears to be undervaluing, we believe the company is wellpositioned for a solid profit cycle ahead.”
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Based on our calculations, Ingersoll Rand Inc. (NYSE: IR) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. IR was in 31 hedge fund portfolios at the end of the first half of 2021, compared to 35 funds in the previous quarter. Ingersoll Rand Inc. (NYSE: IR) delivered an 8.75% 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.
