Artisan Partners, a high value-added investment management firm, published its ‘Artisan Mid Cap Fund’ second quarter 2021 investor letter – a copy of which can be downloaded here. A return of 10.45% was recorded by its Investor Class: ARTMX, 10.46% by its Advisor Class: APDMX, and 10.52% by its Institutional Class: APHMX, in the second quarter of 2021, all below the Russell Midcap® Growth Index that delivered an 11.07% return, but outperforming the Russell Midcap® Index that was up by 7.50% 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 TransUnion (NYSE: TRU) and discussed its stance on the firm. TransUnion is a Chicago, Illinois-based consumer credit reporting agency with a $23.8 billion market capitalization. TRU delivered a 25.49% return since the beginning of the year, while its 12-month returns are up by 48.13%. The stock closed at $124.26 per share on September 2, 2021.
Here is what Artisan Partners has to say about TransUnion in its Q2 2021 investor letter:
“We added to TransUnion. TransUnion is one of the three leading credit bureaus, providing consumer credit data to support mortgage underwriting, credit card issuance, auto loans and fraud detection. We initiated our position in Q1 under the premise the company would benefit from a consumerled economic recovery, driving a sharp acceleration in banks’ lending and, therefore, demand for TransUnion’s data. Our optimism quickly proved well founded, as the company’s recently reported results supported our thesis. With the valuation still at reasonable levels, we added to our position, taking it to a CropSM position in the portfolio. Beyond the cyclical recovery, we’re encouraged by investments the company is making to enter new markets such as income validation, digital marketing data, and identity/fraud detection.”
Based on our calculations, TransUnion (NYSE: TRU) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. TRU was in 35 hedge fund portfolios at the end of the first half of 2021, compared to 41 funds in the previous quarter. TransUnion (NYSE: TRU) delivered a 17.87% 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.
