Should You Consider Selling Your Peloton (PTON) Position Before it’s Too Late?

Artisan Partners, a high value-added investment management firm, published its ‘Artisan Mid Cap Fund’ fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of -0.72% was recorded by its Investor Class: ARTMX, -0.68% by its Advisor Class: APDMX, and -0.66% by its Institutional Class: APHMX, in the fourth quarter of 2021, all underperforming the Russell Midcap® Growth Index that delivered a 2.85% return, and the Russell Midcap® Index that was up by 6.44% 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 Mid Cap Fund, in its Q4 2021 investor letter, mentioned Peloton Interactive, Inc. (NASDAQ: PTON) and discussed its stance on the firm. Peloton Interactive, Inc. is a New York, New York-based exercise equipment company with a $9.4 billion market capitalization. PTON delivered a -20.16% return since the beginning of the year, while its 12-month returns are down by -77.30%. The stock closed at $28.55 per share on February 22, 2022.

Here is what Artisan Mid Cap Fund has to say about Peloton Interactive, Inc. in its Q4 2021 investor letter:

“We ended our campaigns in Peloton. Peloton is a connected fitness franchise known for its stationary exercise bikes that provide live and on-demand cycling classes. When we trimmed our position in 1Q21, we believed the stock’s valuation was reflecting relatively aggressive assumptions about post-pandemic membership growth. However, we underestimated just how much growth would slow by midyear. A seemingly slow launch of the new Peloton treadmill combined with meaningful price cuts on the bike are erasing the company’s margin progress of 2020, resulting in meaningful short-term losses. While we remain optimistic about the company’s long-term potential, we harvested our position given the negative profit cycle dynamics.”

Photo by dylan nolte on Unsplash

Our calculations show that Peloton Interactive, Inc. (NASDAQ: PTON) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. PTON was in 60 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 62 funds in the previous quarter. Peloton Interactive, Inc. (NASDAQ: PTON) delivered a -35.23% return in the past 3 months.

In February 2022, we also shared another hedge fund’s views on PTON 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.