Here’s Why Artisan Partners Decided to Dispose its Zoom (ZM) Position

Artisan Partners, a high value-added investment management firm, published its ‘Artisan Global Discovery Fund’ first quarter 2021 investor letter – a copy of which can be downloaded here. A return of -3.56% was recorded by its Investor Class: APFDX, -3.55% by its Advisor Class: APDDX, and -3.50% by its Institutional Class: APHDX for the first quarter of 2021, all below the MSCI All Country World Index that delivered a 4.57% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Artisan Partners, in its Q1 2021 investor letter, mentioned Zoom Video Communications, Inc. (NASDAQ: ZM), and shared their insights on the company. Zoom Video Communications, Inc. is a San Jose, California-based software company that currently has a $97.6 billion market capitalization. Since the beginning of the year, ZM delivered a -1.72% return, while its 12-month gains are up by 84.72%. As of May 28, 2021, the stock closed at $331.53 per share.

Here is what Artisan Partners has to say about Zoom Video Communications, Inc. in its Q1 2021 investor letter:

“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”

Our calculations show that Zoom Video Communications, Inc. (NASDAQ: ZM) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Zoom Video Communications, Inc. was in 54 hedge fund portfolios, compared to 59 funds in the fourth quarter of 2020. ZM delivered a -11.26% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 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. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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