Artisan Global, Took Profits on Zoom (ZM) After Massive Bullish Run

Artisan Global Discovery Fund, a global investment management firm, published its third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A positive return of 11.79% was recorded by the fund for the 3rd Quarter of 2020, ahead of its MSCI All Country World benchmark that returned 8.13%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.

Artisan Partners, in their Q3 2020 Investor Letter said that they were able to distinguish a value in  Zoom Video Communications, Inc. (NASDAQ: ZM) and initiated a position in the company. Zoom Video Communications, Inc. is a videotelephony software program that currently has a $110.628 billion market cap. For the past 3 months, ZM delivered a -30.78% return and settled at $383.24 per share at the closing of January 14th.

Here is what Artisan Global Discovery Fund has to say about Zoom Video Communications, Inc. in their Investor Letter:

“Zoom’s enormous growth so far this year was on full display in Q2: 458% YoY growth in new customers (companies with >10 employees), 355% YoY revenue growth and a more than doubling in operating margins to 42%. Notable new customers included Exxon Mobil, Activision Blizzard and Service Now. While Zoom will not sustain this extreme rate of growth much longer—we and the company expect elevated customer churn on the other side of the pandemic—there are many potential long-lasting behavioral changes from this crisis that rely on videoconferencing (telehealth, less business travel, online education, etc.). Furthermore, Zoom’s customer base (15 million) still represents a small fraction of the total addressable market for video conferencing (400 million), and the company is in the early days of cross-selling additional products and services (Zoom Phone, Zoom Chat, Zoom Rooms) into its large customer base. However, given the massive YTD run and shares approaching our estimate of PMV, we pared our exposure during the quarter.”

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Last December 2020, we published an article telling that Zoom Video Communications, Inc. (NASDAQ: ZM) is one of the Top 10 Gainers in Focus on the first trading day of 2021. Zoom Video Communications, Inc. proved its worth by delivering a massive 411.06% return for the past 12 months.

As of September 2020, Artisan Partners had a 2.3 million share position in ZM that amounted to $1.08 billion. However, our calculations showed that Zoom Video Communications, Inc. (NASDAQ: ZM) does not belong to the
30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.