Artisan Partners, an investment management company, released its “Artisan Select Equity Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, Investor Class: ARTNX returned -4.77%, its Advisor Class: APDNX returned -4.77%, and Institutional Class: APHNX returned -4.71% compared to S&P 500 Index’s -3.27% return. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Artisan Select Equity Fund highlighted stocks like Henry Schein, Inc. (NASDAQ:HSIC) in the third quarter 2023 investor letter. Headquartered in Melville, New York, Henry Schein, Inc. (NASDAQ:HSIC) is a healthcare products and services provider to medical, dental, and veterinary office-based practitioners. On November 29, 2023, Henry Schein, Inc. (NASDAQ:HSIC) stock closed at $66.66 per share. One-month return of Henry Schein, Inc. (NASDAQ:HSIC) was 4.04%, and its shares lost 17.62% of their value over the last 52 weeks. Henry Schein, Inc. (NASDAQ:HSIC) has a market capitalization of $8.662 billion.
Artisan Select Equity Fund made the following comment about Henry Schein, Inc. (NASDAQ:HSIC) in its Q3 2023 investor letter:
“We added Henry Schein, Inc. (NASDAQ:HSIC) to the portfolio this quarter. Schein is the world’s largest distributor of dental supplies, equipment and related services. It is also the second-largest medical supplies distributor to physicians and alternative care sites. The dental industry is attractive, with favorable demographics due to aging populations, rising awareness of the importance of oral health in developing markets and increased adoption of new technology. The customer base remains fragmented, with approximately 200,000 dentists in the United States.
However, Henry Schein is more than just a distributor of other companies’ products. It has expanded its core distribution business to become an essential partner for its customers. It is the largest practice management software provider, used by 40% of all US dentists. It provides value-added services to dentists around repairs, equipment maintenance, insurance reimbursement and financial services. Perhaps most importantly, it has vertically integrated into manufacturing and is now making some of its own dental products. This includes private label but also extends to branded dental products in key growth areas, such as implants and endodontics. These products and services have better growth rates and meaningfully higher margins than its core business. Expanding its product mix should provide a nice tailwind to profit growth.
The company’s financial performance is currently distorted by the lingering impacts of the pandemic. During the pandemic, there was significant demand for protective equipment like latex gloves and COVID test kits, which boosted its revenues and profits. These excess profits are now normalizing, which has put pressure on reported profit growth and share price. Beneath the surface, we see a healthy business with good underlying growth and a favorable outlook. We are happy to look beyond this temporary period of slower growth and estimate we are paying 12X–13X earnings for a high-quality franchise with high single-digit underlying profit growth.”
A close-up of a dental bracket and wires being fitted into a patient’s mouth.
Henry Schein, Inc. (NASDAQ:HSIC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Henry Schein, Inc. (NASDAQ:HSIC) at the end of third quarter which was 31 in the previous quarter.
We discussed Henry Schein, Inc. (NASDAQ:HSIC) in another article and shared the list of highest-paying countries for dentists. 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.
