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APAM

Artisan Partners Asset Management NYSE:APAM Stock Report

Last Price

US$36.15

Market Cap

US$2.9b

7D

-8.0%

1Y

-26.4%

Updated

19 Aug, 2022

Data

Company Financials +
APAM fundamental analysis
Snowflake Score
Valuation5/6
Future Growth0/6
Past Performance3/6
Financial Health5/6
Dividends3/6

APAM Stock Overview

Artisan Partners Asset Management Inc. is publicly owned investment manager.

Artisan Partners Asset Management Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Artisan Partners Asset Management
Historical stock prices
Current Share PriceUS$36.15
52 Week HighUS$52.89
52 Week LowUS$32.07
Beta1.72
1 Month Change-2.98%
3 Month Change1.66%
1 Year Change-26.44%
3 Year Change38.77%
5 Year Change20.90%
Change since IPO-6.47%

Recent News & Updates

Aug 02

Artisan Partners Asset Management Non-GAAP EPS, revenue misses

Artisan Partners Asset Management press release (NYSE:APAM): Q2 Non-GAAP EPS of $0.79 misses by $0.06. Revenue of $251.4M (-17.5% Y/Y) misses by $2.42M. Shares -3.02%.

Aug 02
Does Artisan Partners Asset Management (NYSE:APAM) Deserve A Spot On Your Watchlist?

Does Artisan Partners Asset Management (NYSE:APAM) Deserve A Spot On Your Watchlist?

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Jul 26

Artisan Partners Only Went Public In 2013 - How Can We Assess Whether The Company Can Weather A Recession?

In an effort to constantly invert, as it was suggested in Poor Charlie’s Almanack, I keep trying to poke holes in my investment cases. In this article, I take a close look at APAM's client cash flows during periods of market turmoil and the firm's top five funds by assets under management. Retention of client funds is good, likely due in part to the strong retention of fund managers, many of whom have been with APAM since its formation in the mid-1990s. However, relative outperformance has declined in recent years, and institutional investors may increasingly question APAM's comparatively high fees. I remain optimistic and expect APAM funds outperform in the event of a long-lasting bear market, but also because I like the company's new strategies. I first looked at mid-cap asset manager Artisan Partners (APAM) in January 2022 and found the staff to be well aligned with shareholder interests and the stock to be a compelling long-term opportunity for income-oriented investors. APAM typically distributes all of its free cash flow in the form of quarterly dividends and a special dividend in February. I discussed various aspects underlying APAM's dividend in my follow-up article in late March. In my last article from late April, I commented on the company's performance in the first quarter of 2022 and its growth initiatives. In the meantime, I have added to my position on several occasions. The stock market has performed quite poorly in the first half of 2022, although I believe a correction was definitely needed at some point after an exuberant 2021 - notwithstanding the significant rise in inflation, the Federal Reserve's tightening of monetary policy, the hot war in Ukraine, and the resulting energy crisis. In this article, I will discuss APAM's performance during market downturns, and that of its five largest funds in particular (as measured by assets under management, AUM), and explain why I believe the stock remains a good investment for long-term investors. Artisan Partners Only Went Public In 2013 - How Can We Safely Assess Whether It Can Weather A Recession? Particularly with cyclical companies - and as an equity-oriented asset manager, APAM is certainly very cyclical - I always examine the company's performance during the Great Recession. Having been formed in the mid-1990s, APAM obviously navigated the 2000 and 2008/09 recessions successfully. However, performance during these periods cannot be examined as APAM did not go public until early 2013. As a result, its earnings history as a public company should be seen in the context of one of the strongest bull markets in recent history. Notable exceptions were the sell-off in late 2018 and, of course, the very brief recession in early 2020. Looking at quarter-end AUM is not particularly accurate, but in the absence of more detailed data, serves as a good proxy for evaluating the company's performance over these periods. Between September 30, 2018 and December 31, 2018, APAM's AUM declined 21.2%, while the S&P 500 declined 16.7%. During this period, APAM's clients withdrew a net $4.9 billion, accounting for 24% of the AUM decline and explaining the difference relatively well. At the end of June 2019, APAM's assets under management returned to September 2018 levels, while client cash flows were relatively balanced during this period. The decline, attributed to client outflows at the end of 2018, is concerning because APAM is a small company that manages the majority of assets for institutional clients, which are typically considered "strong hands". According to APAM's 2021 10-K, only 4% of AUM came from retail investors. About two-thirds of APAM's assets come from institutional channels and are associated with, for example, U.S.-registered mutual funds, non-U.S. funds, state and local governments, and employee benefit plans. It is possible that some of the risk management of the portfolios is based on value-at-risk methods, i.e., selling transactions are triggered during periods of increased volatility. However, institutional clients generally do not withdraw their money unless they are no longer satisfied with the services provided or have found a more suitable alternative. In this context, it should be noted that during the much more severe sell-off in early 2020, APAM’s AUM declined 27.1% (compared to 24.9% for the S&P 500), while the company saw only $0.5 billion in net outflows. Since then, APAM recorded net inflows each quarter ($10 billion in total), with the exception of Q3 2021 (net outflows of $0.8 billion). I consider this a great performance, especially when compared to larger competitors such as T. Rowe Price (TROW) and Franklin Resources (BEN), which I covered previously in March and January, respectively. Especially BEN is struggling with continued outflows (see Figure 3 in my comparative analysis). Of course, it could be argued that a smaller asset manager like APAM benefits from stronger, more personalized customer relationships, but this is certainly a double-edged sword especially during times of continued underperformance. In the following, I will therefore discuss the performance of APAM’s five largest funds. Figure 1: Artisan Partners’ AUM at the end of each quarter, compared to the price of the S&P 500 at the end of each quarter, using SPY as a proxy (own work, based on the company’s 10-Q and 10-K statements, the June 9, 2022 8-K, and the quarterly closing price of SPY) Performance Of Artisan Partners’ Five Largest Funds APAM offers a diversified fund range, with a focus on growth, value, or growth at a reasonable price. Other funds focus on emerging market equities or debt, with the latter currently a priority, being part of the newly formed EMsights Capital Group investment team. The Emerging Markets Debt Opportunities fund was just launched in early April 2022 and had AUM of $21 million (i.e., 0.02% of total AUM) at the end of the six-month period. Figure 2 shows the fund-specific AUM for the five largest APAM funds and the remaining smaller funds (green) in $ values. Figure 3 shows the portfolio distribution normalized to 100% of AUM. Figure 2: Fund-specific AUM of Artisan Partners’ five largest funds and the collective of smaller funds (own work, based on the company’s 8-Ks announcing end-of-month AUM) Figure 3: Fund-specific AUM of Artisan Partners’ five largest funds and the collective of smaller funds, normalized to 100% (own work, based on the company’s 8-Ks announcing end-of-month AUM) The following five funds are APAM's largest and accounted for nearly 73% of the company's total AUM at the end of June 2022: International Value: This equity fund focuses on value investing principles (i.e., companies with strong free cash flow, high returns on capital, strong competitive positions, and solid balance sheets). With $29.4 billion in assets under management as of June 30, 2022, it is APAM's largest fund (up approximately 85% since the end of the first quarter of 2020). The fund currently has a five-star overall rating and a silver analyst rating from Morningstar. It is heavily invested in European equities (>55% of portfolio securities, albeit with a focus on Switzerland and the U.K.). At the end of June 2022, 13.8% of the portfolio was invested in U.S. equities. The emphasis on "safe havens" (in terms of currency) explains the fund's strong performance: year-to-date (YTD), the fund has outperformed its benchmark MSCI Europe, Australasia and Far East (EAFE) by 6.4%, but is still down 13.2%. Since its inception in September 2002 (Investor Class), the fund has outperformed its benchmark by an average of 443 basis points per year, making its expense ratio of 118 basis points (Semi-Annual Report March 31, 2022) quite reasonable. The fund is currently closed to most new investors. Current investors do not appear to have withdrawn funds, as evidenced by the decline in assets under management of approximately 10% YTD. Global Value – APAM's second largest fund by assets under management shares its main investment principles with the International Value fund, the main difference being that this fund is predominantly U.S. focused (45.3% of portfolio securities at the end of June 2022). Nevertheless, certain non-U.S. stocks such as Danone SA (OTCQX:DANOY), Novartis AG (NVS), and Samsung Electronics Co Ltd (OTCPK:SSNLF, OTCPK:SSNNF) are important components of both funds. The fund is currently rated three stars and carries a silver analyst rating by Morningstar. Since its inception in December 2007, it has outperformed its benchmark (MSCI All Countries World Index, ACWI) by an average of about 200 basis points per year, and its expense ratio is similar to that of the International Value Fund. Over the year, the fund outperformed its benchmark by 483 basis points (YTD performance of -15.4%) and remains open to new investors. With AUM down 14% YTD, it is reasonable to assume that the fund has seen net inflows from clients.

Shareholder Returns

APAMUS Capital MarketsUS Market
7D-8.0%1.7%1.4%
1Y-26.4%-10.9%-8.4%

Return vs Industry: APAM underperformed the US Capital Markets industry which returned -10.9% over the past year.

Return vs Market: APAM underperformed the US Market which returned -8.4% over the past year.

Price Volatility

Is APAM's price volatile compared to industry and market?
APAM volatility
APAM Average Weekly Movement5.0%
Capital Markets Industry Average Movement0.5%
Market Average Movement7.6%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.1%

Stable Share Price: APAM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: APAM's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1994498Eric Colsonhttps://www.artisanpartners.com

Artisan Partners Asset Management Inc. is publicly owned investment manager. It provides its services to pension and profit sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. funds, as well as mutual funds, non-U.S.

Artisan Partners Asset Management Inc. Fundamentals Summary

How do Artisan Partners Asset Management's earnings and revenue compare to its market cap?
APAM fundamental statistics
Market CapUS$2.90b
Earnings (TTM)US$249.17m
Revenue (TTM)US$1.16b

9.8x

P/E Ratio

2.1x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
APAM income statement (TTM)
RevenueUS$1.16b
Cost of RevenueUS$552.38m
Gross ProfitUS$612.22m
Other ExpensesUS$363.05m
EarningsUS$249.17m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.70
Gross Margin52.57%
Net Profit Margin21.40%
Debt/Equity Ratio53.9%

How did APAM perform over the long term?

See historical performance and comparison

Dividends

11.6%

Current Dividend Yield

85%

Payout Ratio