Artisan Partners, an investment management company, released its “Artisan Mid Cap Value Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In Q3, US stocks recovered from brief periods of volatility to hit new all-time highs. The portfolio returned strong absolute returns in the third quarter but lagged the benchmark. In the quarter, its Investor Class fund ARTQX returned 8.58%, Advisor Class fund APDQX posted a return of 8.63%, and Institutional Class fund APHQX returned 8.61%, compared to a 10.08% return for the Russell Midcap Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Artisan Mid Cap Value Fund highlighted stocks like Warner Music Group Corp. (NASDAQ:WMG) in the Q3 2024 investor letter. Headquartered in New York, New York, Warner Music Group Corp. (NASDAQ:WMG) is a music entertainment company. The one-month return of Warner Music Group Corp. (NASDAQ:WMG) was 2.14%, and its shares gained 3.91% of their value over the last 52 weeks. On November 15, 2024, Warner Music Group Corp. (NASDAQ:WMG) stock closed at $32.92 per share with a market capitalization of $17.05 billion.
Artisan Mid Cap Value Fund stated the following regarding Warner Music Group Corp. (NASDAQ:WMG) in its Q3 2024 investor letter:
“We are always on the lookout for companies that are under pressure in some form or fashion as this can create the conditions for an attractive entry price. Though equity markets have made substantial gains over the past year, we have still found select opportunities to put capital to work. Q3 purchases included Warner Music Group Corp. (NASDAQ:WMG), MGM Resorts International and Polaris.
Warner Music Group (WMG) is one of the three largest record labels in the world. The music industry had a challenging run post-Napster and pre-Spotify, with a broken monetization model punishing artists and labels alike. We believe we are in early stages of industry revenue growth as key distributors shift from subscriber growth to subscriber monetization. Despite high-quality streaming being adopted by the mainstream, music remains under-monetized compared to the pre-Internet era. We also believe this shift should benefit artists and labels such as WMG. Seventy percent of WMG’s streaming revenue comes from three services: Spotify, YouTube and Apple. Streaming penetration isn’t as high as one would expect in the US and globally, providing a nice runway for growth. However, the market’s outlook for industry growth is more downbeat as shares were down ~14% YTD at the date of our initial purchase in early July and were trading at a trough multiple relative to its public company history. WMG is also much cheaper than its closest competitor Universal Music Group. In regard to WMG’s financial condition, it is solid and stable, with debt that is well termed out and low cost.”
A team of record producers and musicians in the studio, their creative process on full display.
Warner Music Group Corp. (NASDAQ:WMG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Warner Music Group Corp. (NASDAQ:WMG) at the end of the second quarter which was 35 in the previous quarter. While we acknowledge the potential of Warner Music Group Corp. (NASDAQ:WMG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Warner Music Group Corp. (NASDAQ:WMG) and shared the list of best music stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q3 2024 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.