Should I Avoid Artisan Partners Asset Management Inc (APAM)?

We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of Artisan Partners Asset Management Inc (NYSE:APAM) based on that data.

Is Artisan Partners Asset Management Inc (NYSE:APAM) going to take off soon? The smart money was taking a bearish view. The number of bullish hedge fund positions fell by 2 lately. Artisan Partners Asset Management Inc (NYSE:APAM) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 26. Our calculations also showed that APAM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 21 hedge funds in our database with APAM positions at the end of the first quarter.

Today there are several indicators stock market investors use to appraise publicly traded companies. A duo of the less utilized indicators are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the top fund managers can outpace their index-focused peers by a healthy margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Keeping this in mind let’s take a peek at the new hedge fund action surrounding Artisan Partners Asset Management Inc (NYSE:APAM).

Do Hedge Funds Think APAM Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the first quarter of 2020. By comparison, 21 hedge funds held shares or bullish call options in APAM a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Fisher Asset Management was the largest shareholder of Artisan Partners Asset Management Inc (NYSE:APAM), with a stake worth $73 million reported as of the end of June. Trailing Fisher Asset Management was Royce & Associates, which amassed a stake valued at $33.3 million. Millennium Management, Arrowstreet Capital, and Sprott Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Infini Capital allocated the biggest weight to Artisan Partners Asset Management Inc (NYSE:APAM), around 4.35% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, designating 0.68 percent of its 13F equity portfolio to APAM.

Because Artisan Partners Asset Management Inc (NYSE:APAM) has faced a decline in interest from the aggregate hedge fund industry, logic holds that there is a sect of money managers that elected to cut their positions entirely in the second quarter. Intriguingly, Anand Parekh’s Alyeska Investment Group dumped the largest position of all the hedgies followed by Insider Monkey, valued at about $7.3 million in stock. Daniel Johnson’s fund, Gillson Capital, also cut its stock, about $2.7 million worth. These transactions are important to note, as total hedge fund interest was cut by 2 funds in the second quarter.

Let’s check out hedge fund activity in other stocks similar to Artisan Partners Asset Management Inc (NYSE:APAM). We will take a look at KB Home (NYSE:KBH), Ryder System, Inc. (NYSE:R), Pacific Premier Bancorp, Inc. (NASDAQ:PPBI), The Hain Celestial Group, Inc. (NASDAQ:HAIN), CONMED Corporation (NYSE:CNMD), American National Group Inc. (NASDAQ:ANAT), and Avnet, Inc. (NASDAQ:AVT). This group of stocks’ market values are closest to APAM’s market value.

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As you can see these stocks had an average of 21.7 hedge funds with bullish positions and the average amount invested in these stocks was $391 million. That figure was $183 million in APAM’s case. Avnet, Inc. (NASDAQ:AVT) is the most popular stock in this table. On the other hand Pacific Premier Bancorp, Inc. (NASDAQ:PPBI) is the least popular one with only 12 bullish hedge fund positions. Artisan Partners Asset Management Inc (NYSE:APAM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for APAM is 46.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately APAM wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); APAM investors were disappointed as the stock returned 1% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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