Artisan Partners, a distinguished investment management firm, recently disseminated its fourth-quarter 2025 investor letter for the “Artisan Mid Cap Fund.” This document underscores the Fund's investment philosophy, which centers on enterprises exhibiting robust franchise qualities, a strong trajectory of earnings, and a valuation below their estimated private market worth. The latter part of 2025 marked a significant period for US equities, culminating in substantial gains during the fourth quarter. Despite this, the Fund’s various classes—ARTMX, APDMX, and APHMX—recorded modest negative returns of -0.44%, -0.37%, and -0.35% respectively. These figures, however, notably outperformed the Russell Midcap® Growth Index, which saw a decline of -3.70% over the same period. The Fund’s positive performance was primarily fueled by sustained strength in the information technology and healthcare sectors, which continued to demonstrate resilience and growth.
A key focus of Artisan Mid Cap Fund's recent investor letter was Waters Corporation (NYSE: WAT), identified as a compelling investment opportunity. Waters Corporation stands as a prominent provider of analytical workflow solutions, with a particular specialization in liquid chromatography and mass spectrometry (MS) technology systems, alongside comprehensive support products. As of February 23, 2026, Waters Corporation's stock was valued at $327.78 per share. Over the preceding month, the company experienced a return of -15.97%, and its shares recorded a 13.93% loss over the prior 52 weeks. Notwithstanding these recent fluctuations, Waters Corporation maintains a substantial market capitalization of $32.15 billion, reflecting its significant presence and influence within the industry. The Fund's decision to increase its stake in Waters Corporation was predicated on several factors, including the company's strong performance in pharmaceutical and industrial applications. Its entrenched position in pharmaceutical quality assurance testing ensures a consistent stream of recurring revenue, driven by consumables and software essential for its extensive installed instrument base. Furthermore, the Fund anticipates that Waters Corporation will benefit from an anticipated resurgence in commercial and late-stage clinical pharmaceutical demand, a forthcoming cycle of instrument replacements, and an expanding engagement with biologic medicines. This strategic increase in investment followed the announcement of strong quarterly results, which the Fund believes were not fully reflected in the share price, particularly in light of improving momentum in biologics, emerging revenue synergies, and favorable regulatory shifts.
Waters Corporation, though recognized for its investment potential, does not currently feature among the top 30 most favored stocks in hedge fund portfolios. Nevertheless, an analysis of market data indicates a growing interest, with 47 hedge fund portfolios holding Waters Corporation at the close of the fourth quarter, an increase from 42 in the preceding quarter. This trend suggests a burgeoning confidence in the company's prospects among institutional investors. Investing in Waters Corporation embodies a prudent approach to market engagement. The company's foundational strengths, innovation in critical scientific instrumentation, and strategic alignment with burgeoning sectors like biologic medicines create a fertile ground for sustained growth and value creation. By emphasizing rigorous research and a forward-looking perspective, investors can identify and capitalize on opportunities that promise both robust returns and a positive impact on global scientific advancement. Such strategic investments not only bolster financial portfolios but also contribute to the broader ecosystem of innovation and development.