Artisan Mid Cap Fund recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -11.55% for the quarter (investor class), outperforming their benchmark, the Russell Midcap Index which returned -27.07% in the same quarter. You should check out Artisan Mid Cap Fund’s top 5 stock picks which helped them beat the market by nearly 16 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.
In the said letter, Artisan Mid Cap Fund highlighted a few stocks and Catalent Inc. (NYSE:CTLT) is one of them. Catalent is a global provider of delivery technologies and development solutions for biologics, drugs, and consumer health products. Year-to-date, CTLT stock gained 30.0% and on May 11th it had a closing price of $73.21. Its market cap is of $11.3 billion. Here is what Artisan Mid Cap Fund said:
“Catalent is one of the largest contract manufacturing suppliers to the pharmaceuticals industry. The company recently announced its acquisition of MaSTherCell Global, a cell- and gene-therapy contract development and manufacturing organization (CDMO). We believe the acquisition builds upon the company’s capabilities as a leading CDMO for biopharma companies. Gene therapies may finally be ready to emerge as valuable treatment options for patients with certain serious conditions, in our view, and developers of these medicines will require significant help from CDMOs. Shares came under pressure during the market selloff, in part due to concerns that their business supplying clinical trial supplies could be impacted by near-term clinical trial delays. With a longer time horizon, we viewed the share price dislocation as an opportunity to add to our position.”
In Q4 2019, the number of bullish hedge fund positions on CTLT stock decreased by about 28% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with CTLT’s upside potential.
Disclosure: None. This article is originally published at Insider Monkey.