Management & Investment Process

Management

The investment team leverages high degrees of experience and knowledge within a disciplined investment process. Learn more about the Team.
  • Daniel L. Kane, CFA
  • Portfolio Manager
  • 24Years Investment
    Experience
  • Thomas A. Reynolds IV
  • Portfolio Manager
  • 23Years Investment
    Experience
  • Craig Inman, CFA
  • Portfolio Manager
  • 23Years Investment
    Experience

Investment Process

The investment team seeks to invest in cash-producing businesses in strong financial condition that are selling at undemanding valuations.

Attractive Valuation

  • Distinct discount to intrinsic value
  • Low expectations
  • Favorable risk/reward

Sound Financial Condition

  • Focus on financial flexibility and liquidity
  • Seek to protect capital in difficult environments
  • Allows management to pursue value-enhancing initiatives

Attractive Business Economics

  • Focus on free cash flow and return on capital capabilities
  • Ability to grow underlying business value
  • Avoid “value traps”

In-depth Investment Process

 

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Other Strategies Managed

Investment Results (%)

As of 31 October 2022 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Composite — Gross 8.01 -9.64
Composite — Net 7.96 -10.07
S&P 500® Index 8.10 -10.53
Dow Jones US Select Dividend Index 10.33 -1.88
As of 30 September 2022 QTD YTD 1 Yr 3 Yr 5 Yr 10 Yr Inception
Composite — Gross -6.61 -16.34
Composite — Net -6.78 -16.69
S&P 500® Index -4.88 -17.23
Dow Jones US Select Dividend Index -7.71 -11.07
Returns for periods less than one year are not annualized. 

Past performance does not guarantee and is not a reliable indicator of future results. Current performance may be lower or higher than the performance shown. Composite performance has been presented in both gross and net of investment management fees. The portfolio's returns may vary greatly over shorter periods due to the limited operating period since inception.

Investment Risk: Investments will rise and fall with market fluctuations and investor capital is at risk. Investors investing in investment vehicles denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal. These risks, among others, are further described in the Important Disclosures section which should be read in conjunction with this material. 
Top 10 Holdings
(% of total portfolio as of 31 October 2022)
EOG Resources Inc (Energy) 3.6
Altria Group Inc (Consumer Staples) 3.4
Lamar Advertising Co (Real Estate) 3.2
Philip Morris International Inc (Consumer Staples) 3.2
Comcast Corp (Communication Services) 2.8
Cable One Inc (Communication Services) 2.6
nVent Electric PLC (Industrials) 2.6
STORE Capital Corp (Real Estate) 2.4
Medtronic PLC (Health Care) 2.3
Merck & Co Inc (Health Care) 2.3
Total 28.5%
Portfolio Statistics
(as of 31 October 2022)
Median Market Cap (Billions) $19.6
Weighted Avg. Market Cap (Billions) $73.6
Weighted Harmonic Avg. P/E (FY1) 14.1X
Weighted Harmonic Avg. P/E (FY2) 13.5X
Median Price/Book Value 2.3X
Median ROE 17.7%
Median Fixed Charge Coverage Ratio 10.1X
Active Share 92.4%
Number of Securities 54
Cash (% of total portfolio) 4.1%
Market Cap Distribution
(% of portfolio securities as of 31 October 2022)

$ in billions
200.0+ 10.6
140.0–200.0 3.3
90.0–140.0 10.8
60.0–90.0 14.0
30.0–60.0 7.6
15.0–30.0 14.2
5.0–15.0 24.8
0.0–5.0 10.1
Not Applicable 4.7
TOTAL 100.0%
Sector Diversification
(% of portfolio securities as of 31 October 2022)
Communication Services 7.4
Consumer Discretionary 5.6
Consumer Staples 14.9
Energy 5.1
Financials 22.9
Health Care 7.3
Industrials 13.5
Information Technology 6.2
Materials
Real Estate 9.3
Utilities 7.8
Other
Total 100.0%
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Dividend payments are not guaranteed and the amount declared, if any, could vary over time. International investments involve special risks that may in particular cause a loss in principal, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets. Securities of small- and medium-sized companies tend to have a shorter history of operations, be more volatile and less liquid and may have underperformed securities of large companies during some periods. Value securities may underperform other asset types during a given period. These risks, among others, are further described in Artisan Partners Form ADV, which is available upon request. 

Unless otherwise indicated, strategy characteristics relate to that of a representative account managed within the investment composite. It is intended to provide a general illustration of the investment strategy and considerations used by Artisan Partners in managing that strategy. Individual accounts managed to the strategy may differ, at times significantly, from the reference data shown due to varying account restrictions, fees and expenses, and longevity periods, among others. Where applicable, this information is supplemental to, and not to be construed with, a current or prospective client's investment account information.

Performance Source: Artisan Partners/S&P/S&P DJI. Net-of-fees composite returns were calculated using the highest model investment advisory fees applicable to portfolios within the composite. Fees may be higher for certain pooled vehicles and the composite may include accounts with performance-based fees. All performance results are net of commissions and transaction costs, and have been presented gross and net of investment advisory fees. Dividend income is recorded net of foreign withholding taxes on ex-dividend date or as soon after the ex-dividend date as the information becomes available to Artisan Partners. Interest income is recorded on the accrual basis. Performance results for the Index include reinvested dividends and are presented net of foreign withholding taxes but, unlike the portfolio's returns, do not reflect the payment of sales commissions or other expenses incurred in the purchase or sale of the securities included in the indices. 

Data & Statistics Sources: Artisan Partners/GICS. Sector exposure percentages reflect sector designations as currently classified by GICS. Artisan Partners may exclude outlier data and certain securities which lack applicable attributes, such as private securities when calculating portfolio statistics. If information is unavailable for a particular security Artisan may use data from a related security to calculate portfolio statistics. Securities of the same issuer are aggregated to determine a holding’s weight in the portfolio. Cash weighting includes cash and cash equivalents. Totals may not sum due to rounding. 

Median is the data's midpoint value. Market Cap (USD) is the aggregate value of all of a company's outstanding equity securities. Weighted Average is the average of values weighted to the data set's composition. Weighted Harmonic Average is a calculation of weighted average commonly used for rates or ratios. Price-to-Earnings Ratio (P/E Ratio) measures how expensive a stock is. Earnings figures used for FY1 and FY2 are estimates for the current and next unreported fiscal years. Price-to-Book Ratio (P/B Ratio) is a valuation measure used to compare a stock's market value to its book value. Return on Equity (ROE) is a profitability ratio that measures the amount of net income returned as a percentage of shareholders equity. Fixed Charge Coverage Ratio indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. Active Share is defined as the percentage of a portfolio that differs from its benchmark index. Active Share can range from 0% for an index fund that perfectly mirrors its benchmark to 100% for a portfolio with no overlap with an index. Return on Capital (ROC) is a measure of how effectively a company uses the money (borrowed or owned) invested in its operations. 

S&P 500® Index measures the performance of 500 US companies focused on the large-cap sector of the market. The Dow Jones US Select Dividend Index measures the performance of the US's leading stocks by dividend yield. The index(es) are unmanaged; include net reinvested dividends; do not reflect fees or expenses; and are not available for direct investment. 

The S&P 500 Index is a product of S&P Dow Jones Indices LLC (“S&P DJI”) and/or its affiliates and has been licensed for use.  Copyright © 2022 S&P Dow Jones Indices LLC, a division of S&P Global, Inc. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). None of S&P DJI, Dow Jones, their affiliates or third party licensors makes any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and none shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.

The Dow Jones US Select Dividend Index ("Index") is a product of S&P Dow Jones Indices LLC ("S&P DJI") and/or its affiliates and has been licensed for use. Copyright © 2022 S&P Dow Jones Indices LLC, a division of S&P Global, Inc.. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"). None of S&P DJI, Dow Jones, their affiliates or third party licensors makes any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and none shall have any liability for any errors, omissions, or interruptions of any index or the data included therein. 

The Global Industry Classification Standard (GICS®) is the exclusive intellectual property of MSCI Inc. (MSCI) and Standard & Poor’s Financial Services, LLC (S&P). Neither MSCI, S&P, their affiliates, nor any of their third party providers (“GICS Parties”) makes any representations or warranties, express or implied, with respect to GICS or the results to be obtained by the use thereof, and expressly disclaim all warranties, including warranties of accuracy, completeness, merchantability and fitness for a particular purpose. The GICS Parties shall not have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of such damages.