Artisan Partners, an investment management company, released its “Artisan Mid Cap Value Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, its Investor Class fund ARTQX returned -2.94%, Advisor Class fund APDQX posted a return of -2.95%, and Institutional Class fund APHQX returned -2.89 %, compared to a -4.46% return for the Russell Midcap Value Index. The portfolio had a negative return in Q3 but performed better than the Russell Midcap Value Index due to favorable security selection. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Artisan Mid Cap Value Fund highlighted stocks like Dollar General Corporation (NYSE:DG) in the third quarter 2023 investor letter. Headquartered in Goodlettsville, Tennessee, Dollar General Corporation (NYSE:DG) is a discount retailer. On October 13, 2023, Dollar General Corporation (NYSE:DG) stock closed at $111.16 per share. One-month return of Dollar General Corporation (NYSE:DG) was -3.91%, and its shares lost 53.02% of their value over the last 52 weeks. Dollar General Corporation (NYSE:DG) has a market capitalization of $24.397 billion.
Artisan Mid Cap Value Fund made the following comment about Dollar General Corporation (NYSE:DG) in its Q3 2023 investor letter:
“On the downside, our biggest detractors included Dollar General Corporation (NYSE:DG). DG, a discount retail chain in the US, reported weak results, missed expectations and reduced full-year guidance. DG clearly benefited from COVID stimulus checks, reflected in the bump it experienced in revenues and margins. However, the effects have worn off. The lower end consumer is being hurt by inflation, stiffer economic conditions, lower tax refunds and reduced SNAP benefits. Margins are also under pressure due to labor costs, shrink and markdowns. Some of the issues are likely self-inflicted. After years of focusing on store growth to drive the top line, store standards have suffered. Addressing store standards is needed to turn around flagging traffic, comps and customer satisfaction. On the positive side, discount retail due to its trade-down feature tends to be a defensive business during economic slowdowns. DG has a strong market position and faces less competition than other discounters due to its largely rural footprint. The business’s value proposition is everyday low prices, a convenient format and proximity. The company has leverage due to capital expenditures, but interest coverage of 10X is strong. From a valuation perspective, the froth from the pandemic is gone. Shares now trade at a low-teens price-to-earnings multiple— the lowest levels since it went public in 2009 and much cheaper than the low- to mid-twenties from 2020 to 2022. So, we aren’t paying for margin upside or store growth. Those would be bonuses. If the company can continue to grow revenues, generate cash flow and buy back stock, we still see a path to success.”
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Dollar General Corporation (NYSE:DG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 57 hedge fund portfolios held Dollar General Corporation (NYSE:DG) at the end of the second quarter, which was 53 in the previous quarter.
We discussed Dollar General Corporation (NYSE:DG) in another article and shared the list of best stocks to buy in falling markets according to hedge funds. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
