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Artisan Small Cap on JFrog Ltd. (FROG): “The Growth Runway Ahead is Meaningful”

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  • FROG

Artisan Partners Limited Partnership, a high value-added investment management firm, published its ‘Artisan Small Cap Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 27.07% was recorded by its Investor Class: ARTSX, 27.14% by its Advisor Class: APDSX, and 27.15% by its Institutional Class: APHSX, in the fourth quarter of 2020, all below its Russell 2000 Growth Benchmark that delivered a 29.61% return and its Russel 2000 Index that was up by 31.37% in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Artisan Small Cap Fund, in their Q4 2020 investor letter, mentioned JFrog Ltd. (NASDAQ: FROG) and emphasized their views on the company. JFrog Ltd. is a California-based software company that currently has a $4.5 billion market capitalization. Since the beginning of the year, FROG delivered a -22.81% return, resulting to a 3-month loss of -27.86%. As of March 18, 2021, the stock closed at $48.50 per share.

Here is what Artisan Small Cap Fund has to say about JFrog Ltd. in their Q4 2020 investor letter:

"We also added to our position in JFrog. JFrog is the market leader in continuous software release management (CSRM), which enables a faster cadence of developing, securing and releasing software to customers and devices (servers, PCs, smartphones, automobiles, Internet of things) to ensure users have the most up-to-date security and features. Digital transformations are accelerating, and companies across all industries are adopting new software applications to automate different parts of their businesses. This has helped fuel the adoption of DevOps, a set of practices working to automate and integrate the processes between software development and IT teams, so they can build, test and release software faster and more reliably to their users. JFrog’s core product, Artifactory, is a critical bridge connecting the development side of the DevOps workflow to the operation side and ultimately to software release. The company already has an impressive slate of customers (~75% of Fortune 100 companies), which we believe is not only a testament to the quality of its product offering, but also an opportunity for it to penetrate further. In addition, the addressable market is already sizable and still growing, and as the market leader in CSRM, the growth runway ahead is meaningful."

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Oleksiy Mark/Shutterstock.com

Our calculations show that JFrog Ltd. (NASDAQ: FROG) 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, JFrog Ltd. was in 16 hedge fund portfolios, compared to 22 funds in the third quarter. FROG delivered a -26.96% return in the past month.

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.