Here’s Why Artisan Partners Added Netflix (NFLX) to its Portfolio

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 Netflix, Inc. (NASDAQ:NFLX) in the second quarter investor letter. Headquartered in Los Gatos, California, Netflix, Inc. (NASDAQ:NFLX) is an entertainment services providing company. On September 26, 2022, Netflix, Inc. (NASDAQ:NFLX) stock closed at $224.07 per share. One-month return of Netflix, Inc. (NASDAQ:NFLX) was 1.55% and its shares lost 61.62% of their value over the last 52 weeks. Netflix, Inc. (NASDAQ:NFLX) has a market capitalization of $99.645 billion.

Here is what Artisan Partners specifically said about Netflix, Inc. (NASDAQ:NFLX) in its Q2 2022 investor letter:

“Netflix, Inc. (NASDAQ:NFLX) was the weakest among the group, down 53%. We initiated our position in Netflix in Q1 after shares fell by more than half due to concerns about subscriber growth and increasing competition from streaming upstarts. The stock then suffered a second down leg in April after the company reported subscriber losses for the first time in its history. As we write this letter in July, the company reported its second consecutive quarter of subscriber losses, but the nearly 1 million subscribers lost were much lower than the 2 million that management had forecast, and shares rallied on the news. For patient investors, there is reason for optimism that subscriber growth will turn around. The company has plans to crack down on password sharing and is launching a lower cost advertising supported tier in 2023. Our investment case is focused on an undemanding valuation, massive scale, a continued shift in time and attention from linear TV to streaming, and a financial condition which gives management the flexibility to operate unconstrained during a transition period for the business. We also believe Netflix can leverage its massive global scale of 221 million subscribers into positive free cash flow though steady pricing increases and content spending controls. We added to our position during the quarter.”

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Netflix, Inc. (NASDAQ:NFLX) is in 19th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 95 hedge fund portfolios held Netflix, Inc. (NASDAQ:NFLX) at the end of the second quarter which was 109 in the previous quarter.

We discussed Netflix, Inc. (NASDAQ:NFLX) in another article and shared Pershing Square Holdings’ views on the company. 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.