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 Polaris Inc. (NYSE:PII) in the Q3 2024 investor letter. Polaris Inc. (NYSE:PII) is a powersports vehicles manufacturer that operates through Off-Road, On-Road, and Marine segments. The one-month return of Polaris Inc. (NYSE:PII) was -16.67%, and its shares lost 27.01% of their value over the last 52 weeks. On November 15, 2024, Polaris Inc. (NYSE:PII) stock closed at $66.82 per share with a market capitalization of $3.727 billion.
Artisan Mid Cap Value Fund stated the following regarding Polaris Inc. (NYSE:PII) 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, MGM Resorts International and Polaris.
Polaris designs, engineers and manufactures powersports vehicles, operating in three segments: off-road, on-road and marine. The company has had a couple bad quarters, consistent with other industry peers, as demand for recreation is down. Additionally, consumer financing costs and dealer floorplan costs are up due to higher interest rates. The combination is pressuring margins. It’s a discretionary business to be sure, so we have eyes wide open. However, we believe that inventory issues are creating an opportunity to buy a market leader at an absolute cheap price. The stock is the lowest since the first half of 2020 when the pandemic began. The company is well run historically, and current management has demonstrated operating discipline by divesting bad businesses acquired under old management, focusing on the company’s roots in power sports and continuing its history of returning capital to shareholders via dividends and buybacks. Returns for the business are strong with returns on tangible capital most years in the mid-to-high teens. It is well financed with a balance sheet that is well termed out.”
A motorcyclist enjoying the open road on a sunny day.
Polaris Inc. (NYSE:PII) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Polaris Inc. (NYSE:PII) at the end of the second quarter which was 21 in the previous quarter. In the third quarter, Polaris Inc.’s (NYSE:PII) sales declined 23% year-over-year due to management’s decision to reduce dealer inventory. While we acknowledge the potential of Polaris Inc. (NYSE:PII) 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 Polaris Inc. (NYSE:PII) and shared the list of best RV and camping stocks to buy. 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.