Here’s Why Artisan Partners Sees Spotify (SPOT)’s Decline as an Opportunity

Artisan Partners, a high value-added investment management firm, published its ‘Artisan Mid Cap Fund’ fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of -0.72% was recorded by its Investor Class: ARTMX, -0.68% by its Advisor Class: APDMX, and -0.66% by its Institutional Class: APHMX, in the fourth quarter of 2021, all underperforming the Russell Midcap® Growth Index that delivered a 2.85% return, and the Russell Midcap® Index that was up by 6.44% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Artisan Mid Cap Fund, in its Q4 2021 investor letter, mentioned Spotify Technology S.A. (NYSE: SPOT) and discussed its stance on the firm. Spotify Technology S.A. is a Stockholm, Sweden-based music streaming company with a $28.7 billion market capitalization. SPOT delivered a -36.17% return since the beginning of the year, while its 12-month returns are down by -57.31%. The stock closed at $149.38 per share on February 22, 2022.

Here is what Artisan Mid Cap Fund has to say about Spotify Technology S.A. in its Q4 2021 investor letter:

“Spotify is a leading global franchise for audio streaming (music, podcasts, etc.) with a high-quality content library and user interface. Despite a highly competitive landscape, we believe Spotify’s market position is secure and is being further reinforced by its rapidly expanding podcast content, some of which is exclusive. We believe this podcast strategy will drive an accelerating profit cycle as well, since podcast content—unlike music—is not controlled by powerful music labels and is therefore more leverageable as Spotify’s user base grows. The company has also invested in systems—creative tools and advertising technology—to help independent podcast creators (and Spotify) better monetize this content. As the stock declined during the late Q4 growth stock correction, we viewed it as an opportunistic chance to add Spotify to the GardenSM ahead of an expected profit cycle upturn.”

Photo by Heidi Fin on Unsplash

Our calculations show that Spotify Technology S.A. (NYSE: SPOT) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. SPOT was in 53 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 48 funds in the previous quarter. Spotify Technology S.A. (NYSE: SPOT) delivered a -40.33% return in the past 3 months.

In February 2022, we also shared another hedge fund’s views on SPOT in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.