Artisan Partners, an investment management company, released its first-quarter 2026 investor letter for the “Artisan Small Cap Fund”. A copy of the letter is available to download here. US equities were mixed in Q1 2026, with major indices hitting all-time highs in January before retreating amid geopolitical tensions, changing monetary policy, and economic uncertainty. Energy stocks surged, outpacing the market, while value outperformed growth as investors moved from tech to commodity-sensitive sectors. Market leadership broadened, with mid- and small-cap indices performing better than large caps. The Iran conflict influenced market behavior. AI-related investments supported capital spending and earnings, though investor sentiment was mixed. The portfolio saw negative absolute returns but outpaced the Russell 2000® Growth Index, offering some downside protection. Investor Class: ARTSX, Advisor Class: APDSX, and Institutional Class: APHSX returned -2.72%, -2.68%, and -2.69%, respectively, in the first quarter compared to -2.81% return for the index. The market shifted towards cyclical, commodity sectors, less aligned with high-quality franchises, due to geopolitical events and energy shocks. Despite this, many portfolio companies maintained solid earnings aligned with their profit cycles. The Firm views this environment as supportive of its stock selection approach, focused on bottom-up stock selection across industries. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Artisan Small Cap Fund highlighted Freshpet, Inc. (NASDAQ:FRPT). Freshpet, Inc. (NASDAQ:FRPT) is a pet food company that manufactures, distributes, and markets natural fresh meals and treats. On June 4, 2026, Freshpet, Inc. (NASDAQ:FRPT) closed at $49.22 per share. One-month return of Freshpet, Inc. (NASDAQ:FRPT) was -7.27%, and its shares lost 38.79% over the past 52 weeks. Freshpet, Inc. (NASDAQ:FRPT) has a market capitalization of $2.42 billion.
Artisan Small Cap Fund stated the following regarding Freshpet, Inc. (NASDAQ:FRPT) in its Q1 2026 investor letter:
“During the quarter, we initiated new GardenSM positions in Onto Innovation, Baldwin Group and Freshpet, Inc. (NASDAQ:FRPT). Freshpet is a leading US brand in refrigerated fresh pet food, supported by a differentiated in-store distribution network and consistent share gains within the premium pet food segment. We initiated a GardenSM position following renewed evidence of its durable competitive advantage, reinforced by unsuccessful attempts from larger competitors to enter the category, including General Mills’ Blue Buffalo brand. With fresh food accounting for a small share of the overall pet food market, we see a long runway for growth. The company has also expanded online distribution through partnerships with Amazon and Walmart, which we expect will enhance convenience and broaden access to its products over time.”
Freshpet, Inc. (NASDAQ:FRPT) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 36 hedge fund portfolios held Freshpet, Inc. (NASDAQ:FRPT) at the end of the first quarter, compared to 37 in the previous quarter. While we acknowledge the risk and potential of Freshpet, Inc. (NASDAQ:FRPT) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Freshpet, Inc. (NASDAQ:FRPT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Freshpet, Inc. (NASDAQ:FRPT) and shared the list of heavily-battered consumer stocks that could triple by 2027. In addition, please check out our hedge fund investor letters Q1 2026 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.
