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Artisan Partners, an investment management company, released its “Artisan Mid Cap Value Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The Russell Midcap Value Index ended Q4 somewhat lower, down -1.75%, after posting robust gains in Q3. The index provided a 13.07% return for the year. Following the US election, mid-cap value stocks experienced a significant rally with the larger US equity market, hitting all-time highs before declining in December. In the quarter, the fund’s Investor Class fund ARTQX returned -3.70%, Advisor Class fund APDQX posted a return of -3.67%, and Institutional Class fund APHQX returned -3.67%, compared to a -1.75% return for the Russell Midcap Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Artisan Mid Cap Value Fund emphasized stocks such as Cable One, Inc. (NYSE:CABO). Cable One, Inc. (NYSE:CABO) is a US-based data, video, and voice services provider. The one-month return of Cable One, Inc. (NYSE:CABO) was -23.23%, and its shares lost 48.88% of their value over the last 52 weeks. On March 14, 2025, Cable One, Inc. (NYSE:CABO) stock closed at $226.48 per share with a market capitalization of $1.275 billion.
Artisan Mid Cap Value Fund stated the following regarding Cable One, Inc. (NYSE:CABO) in its Q4 2024 investor letter:
"Turning to a discussion of full-year performance results, our biggest detractors were aforementioned Dentsply Sirona, Dollar General and Cable One, Inc. (NYSE:CABO). Shares of Cable One, a small cable company operating in rural US markets, have remained weak due to depressed broadband subscriber growth. After strong subscriber additions during COVID that pulled forward growth, the slowdown in the housing market and increased competition from fixed wireless and fiber have led to weak subscriber growth more recently. Importantly, Cable One remains competitively advantaged in the majority of its markets. Across only about 40%ofCableOne’sfootprint is there a competitor that can offer 100 megabits per second. This matters because customers care about speed and reliability. Despite recent growth challenges, free cash flow conversion remains solid, supporting its dividend. While Cable One has more leverage than we typically like to see, it is still well financed. Net debt-to-EBITDA is about 4X, and the company has about $1 billion in investments on the balance sheet. Aiming to stabilize broadband revenue, Cable One has been making strategic adjustments designed to add customers without sacrificing pricing. A reorganization that removes layers of middle management is also underway, which should create costs savings and potentially provide operational benefits. Despite recent growth challenges, free cash flow conversion remains solid, supporting its dividend, and the valuation is highly attractive, having a double-digit free cash flow yield and selling below 10Xourestimate of normalized earnings."