Artisan Partners, an investment management company, released its “Artisan Value Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The growth stock trend that had driven US stocks up since late 2022 collapsed in Q1. The fund’s Investor Class ARTLX, Advisor Class APDLX, and Institutional Class APHLX returned 2.23%, 2.24%, and 2.31%, respectively, in the first quarter compared to a 2.14% return for the Russell 1000® Value Index. The relative performance was positively influenced by its sector allocation, which included lower-than-benchmark weightings in information technology and industrials, as well as a higher allocation in consumer staples. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.
In its first-quarter 2025 investor letter, Artisan Value Fund highlighted stocks such as Philip Morris International Inc. (NYSE:PM). Philip Morris International Inc. (NYSE:PM) tobacco company working to deliver a smoke-free future. The one-month return of Philip Morris International Inc. (NYSE:PM) was 4.10%, and its shares have appreciated by 75.45% over the past 52 weeks. On May 29, 2025, Philip Morris International Inc. (NYSE:PM) closed at $177.87 per share, with a market capitalization of $276.86 billion.
Artisan Value Fund stated the following regarding Philip Morris International Inc. (NYSE:PM) in its Q1 2025 investor letter:
“Our top individual contributor was Philip Morris International Inc. (NYSE:PM), a global tobacco company. PM is our largest position and our top contributor to returns over the one-year period. PM has sought to reduce its reliance on traditional cigarettes—a category in steady decline—by evolving its product portfolio to focus on potentially less harmful smoke-free products that offer superior growth. In the latest quarter, strong top- and bottom-line growth was driven by PM’s smoke-free product platform led by IQOS, a heat-not-burn tobacco alternative, and Zyn nicotine pouches. Gross margins in its smoke-free business expanded a remarkable 330bps, and smoke-free is now 40% of PM’s total gross profit. Since its 2022 acquisition of Zyn maker Swedish Match, a company we previously held in the portfolio, the popularity of Zyn pouches has surged, helped by free advertising from social media influencers and PM’s ability to leverage its global scale and distribution. We believe PM still has significant runway for growth in the US—the world’s most profitable nicotine market and one that makes up ess than 10%ofPM’srevenues. On the horizon is the planned rollout in the US of its next-generation IQOS ILUMA heated tobacco device later this year. Looking at PM through our margin-of safety criteria, the business trades for an undemanding valuation and has extraordinary business economics and a strong credit profile.”
A man exhaling smoke from a cigarette indicating the use of tobacco products.
Philip Morris International Inc. (NYSE:PM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held Philip Morris International Inc. (NYSE:PM) at the end of the first quarter, which was 102 in the previous quarter. Philip Morris International Inc. (NYSE:PM) delivered double-digit organic net revenue growth of plus 10.2% in Q1 2025, reaching $9.3 billion in total. While we acknowledge the potential of Philip Morris International Inc. (NYSE:PM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Philip Morris International Inc. (NYSE:PM) and shared the list of best unstoppable stocks that pay dividends. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
