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 Wayfair Inc. (NYSE:W) is one of them. Wayfair is an e-commerce company that sells furniture and home-goods. Year-to-date, W stock gained 112.7% and on May 8th it had a closing price of $188.05. Its market cap is of $18.0 billion. Here is what Artisan Mid Cap Fund said:
“Revenue growth has slowed dramatically for Wayfair over the last year, in part due to rising trade tariffs. Meanwhile the company has been dramatically expanding headcount as well as its advertising and logistics spend, resulting in increasing losses and pushing out our margin expansion thesis. Given our lack of visibility into when these headwinds may abate, we decided to exit our position.”
In Q4 2019, the number of bullish hedge fund positions on W stock decreased by about 3% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with W’s growth concerns.
Disclosure: None. This article is originally published at Insider Monkey.