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Is Artisan Partners Asset Management Inc (APAM) A Good Stock To Buy?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 28, so let’s proceed with the discussion of the hedge fund sentiment on Artisan Partners Asset Management Inc (NYSE:APAM).

Artisan Partners Asset Management Inc (NYSE:APAM) investors should be aware of a decrease in hedge fund interest recently. Our calculations also showed that APAM isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Why do we pay any attention at all to hedge fund sentiment? 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 40 percentage points since May 2014 through May 30, 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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Paul Marshall Marshall Wace

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to go over the key hedge fund action regarding Artisan Partners Asset Management Inc (NYSE:APAM).

How have hedgies been trading Artisan Partners Asset Management Inc (NYSE:APAM)?

Heading into the third quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in APAM over the last 16 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

No of Hedge Funds with APAM Positions

Of the funds tracked by Insider Monkey, Renaissance Technologies has the biggest position in Artisan Partners Asset Management Inc (NYSE:APAM), worth close to $84.3 million, amounting to 0.1% of its total 13F portfolio. On Renaissance Technologies’s heels is Fisher Asset Management, managed by Ken Fisher, which holds a $44.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions encompass Paul Marshall and Ian Wace’s Marshall Wace LLP, Chuck Royce’s Royce & Associates and Ken Griffin’s Citadel Investment Group.

Judging by the fact that Artisan Partners Asset Management Inc (NYSE:APAM) has experienced a decline in interest from the smart money, it’s easy to see that there were a few money managers that elected to cut their positions entirely by the end of the second quarter. At the top of the heap, Matthew Hulsizer’s PEAK6 Capital Management cut the largest investment of the 750 funds watched by Insider Monkey, worth an estimated $1.3 million in stock. Andrew Feldstein and Stephen Siderow’s fund, Blue Mountain Capital, also dropped its stock, about $0.6 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 1 funds by the end of the second quarter.

Let’s check out hedge fund activity in other stocks similar to Artisan Partners Asset Management Inc (NYSE:APAM). These stocks are Zai Lab Limited (NASDAQ:ZLAB), Select Medical Holdings Corporation (NYSE:SEM), Terex Corporation (NYSE:TEX), and Cannae Holdings, Inc. (NYSE:CNNE). This group of stocks’ market values resemble APAM’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ZLAB 17 240494 0
SEM 17 131929 -4
TEX 15 260697 -6
CNNE 19 275079 -5
Average 17 227050 -3.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $227 million. That figure was $203 million in APAM’s case. Cannae Holdings, Inc. (NYSE:CNNE) is the most popular stock in this table. On the other hand Terex Corporation (NYSE:TEX) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Artisan Partners Asset Management Inc (NYSE:APAM) is even less popular than TEX. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on APAM, though not to the same extent, as the stock returned 5% during the third quarter and outperformed the market as well.

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

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