Artisan Partners, a high value-added investment management firm, published its ‘Artisan Small Cap Fund’ second quarter 2021 investor letter – a copy of which can be downloaded here. A return of 4.36% was recorded by its Investor Class: ARTSX, 4.40% by its Advisor Class: APDSX, and 4.41% by its Institutional Class: APHSX for the second quarter of 2021, all above the Russell 2000® Growth Index that delivered a 3.92% return and the Russell 2000® Index that was up by 4.29% 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 Cognex Corporation (NASDAQ: CGNX) and discussed its stance on the firm. Cognex Corporation is a Natick, Massachusetts-based commercial company with a $15.6 billion market capitalization. CGNX delivered a 10.18% return since the beginning of the year, while its 12-month returns are up by 39.99%. The stock closed at $88.46 per share on September 3, 2021.
Here is what Artisan Partners has to say about Cognex Corporation in its Q2 2021 investor letter:
“Cognex is an innovative manufacturer of machine vision systems enabling computers to identify, measure, locate and/or ensure quality in a production process at speeds which the human eye cannot process. Machine vision systems are used to ensure product quality (eliminating defects, verifying proper assembly) to automate production and track parts. Over the last several years, the company’s dominant market position has enabled it to experience impressive growth as demand for vision technology has rapidly increased. While we believe vision penetration is still in the early stages globally, the company’s market cap mandate exceeds our small-cap mandate, and we ended our successful investment campaign which began in 2013.”
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Based on our calculations, Cognex Corporation (NASDAQ: CGNX) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. CGNX was in 35 hedge fund portfolios at the end of the first half of 2021, compared to 34 funds in the previous quarter. Cognex Corporation (NASDAQ: CGNX) delivered an 11.27% 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.
