Artisan Partners, a high value-added investment management firm, published its ‘Artisan Small Cap Fund’ fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of -6.99% was recorded by its Investor Class: ARTSX, -6.93% by its Advisor Class: APDSX, and -6.93% by its Institutional Class: APHSX for the fourth quarter of 2021, all below the Russell 2000® Growth Index that delivered a 0.01% return and the Russell 2000® Index that was up by 2.14% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Artisan Small Cap Fund, in its Q4 2021 investor letter, mentioned Zynga Inc. (NASDAQ: ZNGA) and discussed its stance on the firm. Zynga Inc. is a San Francisco, California-based social game developer with a $9.8 billion market capitalization. ZNGA delivered a 36.25% return since the beginning of the year, while its 12-month returns are down by -22.76%. The stock closed at $8.72 per share on February 23, 2022.
Here is what Artisan Small Cap Fund has to say about Zynga Inc. in its Q4 2021 investor letter:
“Shares of Zynga have been pressured in recent quarters as the company adapts to Apple’s new privacy restrictions which make the acquisition of new users via targeted advertising more difficult. For
background, iOS 14.5, which was released in April, requires apps to ask users for permission to collect and share data. Opting out prevents developers from attaching an identifier for advertisers (IDFA), which is used to target and measure the effectiveness of advertising on users across mobile devices. We held our ground over this period of underperformance given our belief the company had several medium and long-term tailwinds enabling it to overcome this development: an arsenal of “Bold Beats”—new content, features and gameplay modes—to attract new audiences, further engage current players, bring back lapsed players, develop and roll out new games (Star Wars: Hunters, FarmVille 3), invest in further advertising technology/data capabilities and expand its global reach. That said, shortly after the end of Q4, Take-Two Interactive announced its intention to acquire Zynga for $9.86/share in cash and equity—representing a 64% premium to the prior day’s closing share price. Since the combined entity’s market cap exceeds our small-cap mandate, we will look to end our successful investment campaign which began in 2017 (over 750bps of relative outperformance).”
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Our calculations show that Zynga Inc. (NASDAQ: ZNGA) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. ZNGA was in 47 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 52 funds in the previous quarter. Zynga Inc. (NASDAQ: ZNGA) delivered a 38.19% return in the past 3 months.
In January 2022, we also shared another hedge fund’s views on ZNGA in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
