There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Jeff Ubben, George Soros and Carl Icahn think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Artisan Partners Asset Management Inc (NYSE:APAM).
Is Artisan Partners Asset Management Inc (NYSE:APAM) an excellent investment now? Investors who are in the know are buying. The number of long hedge fund bets inched up by 3 lately. Our calculations also showed that APAM isn’t among the 30 most popular stocks among hedge funds.
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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a glance at the latest hedge fund action surrounding Artisan Partners Asset Management Inc (NYSE:APAM).
What have hedge funds been doing with Artisan Partners Asset Management Inc (NYSE:APAM)?
At Q4’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from one quarter earlier. By comparison, 13 hedge funds held shares or bullish call options in APAM a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in Artisan Partners Asset Management Inc (NYSE:APAM), which was worth $38.1 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $26.9 million worth of shares. Moreover, Royce & Associates, Marshall Wace LLP, and Sprott Asset Management were also bullish on Artisan Partners Asset Management Inc (NYSE:APAM), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, key money managers have jumped into Artisan Partners Asset Management Inc (NYSE:APAM) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the biggest position in Artisan Partners Asset Management Inc (NYSE:APAM). Marshall Wace LLP had $13.2 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.8 million investment in the stock during the quarter. The other funds with brand new APAM positions are Dmitry Balyasny’s Balyasny Asset Management, Michael Platt and William Reeves’s BlueCrest Capital Mgmt., and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Artisan Partners Asset Management Inc (NYSE:APAM) but similarly valued. These stocks are Appian Corporation (NASDAQ:APPN), United Community Banks Inc (NASDAQ:UCBI), Brinker International, Inc. (NYSE:EAT), and Cloudera, Inc. (NYSE:CLDR). This group of stocks’ market caps match APAM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| APPN | 9 | 246766 | 1 |
| UCBI | 14 | 70664 | 0 |
| EAT | 26 | 166479 | 0 |
| CLDR | 26 | 132557 | 1 |
| Average | 18.75 | 154117 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $154 million. That figure was $119 million in APAM’s case. Brinker International, Inc. (NYSE:EAT) is the most popular stock in this table. On the other hand Appian Corporation (NASDAQ:APPN) is the least popular one with only 9 bullish hedge fund positions. Artisan Partners Asset Management Inc (NYSE:APAM) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on APAM as the stock returned 36% and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
