Zoom (ZM) Performed Poorly, but Long-Term Future Remains Bright Says Artisan Partners

Artisan Partners Limited Partnership, a high value-added investment management firm, published its ‘Artisan Global Discovery Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 16.95% was recorded by its Investor Class: APFDX, 17% by its Advisor Class: APDDX, and 17.05% by its Institutional Class: APHDX, in the fourth quarter of 2020, outperforming its MSCI All Country World benchmark that delivered a 14.68% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Artisan Global Discovery Fund, in their Q4 2020 investor letter, mentioned Zoom Video Communications, Inc. (NASDAQ: ZM) and emphasized their views on the company. Zoom Video Communications, Inc. is a California-based communications technology company that currently has a $100.3 billion market capitalization. Since the beginning of the year, ZM delivered a 1.99% return, impressively extending its 12-month gains to 209.65%. As of March 15, 2021, the stock closed at $350 per share.

Here is what Artisan Global Discovery Fund has to say about Zoom Video Communications, Inc. in their Q4 2020 investor letter:

“Among our bottom contributors in Q4 was Zoom Video Communications. Shares of Zoom Video Communications were pressured amid the strong vaccine data released during the quarter. Furthermore, the company’s Q3 results, though incredibly strong, showed signs of deceleration from prior quarters’ torrid pace. While there will be a reduced need for some videoconferencing use cases on the other side of the pandemic, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—given sustainably higher remote work arrangements, more online learning options and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YOY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we acknowledge the near-term headwinds and have trimmed our position to a modest size.”

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Our calculations show that Zoom Video Communications, Inc. (NASDAQ: ZM) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Zoom Video Communications, Inc. was in 59 hedge fund portfolios, compared to 56 funds in the third quarter. ZM delivered a -13.52% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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