Baron Funds, an investment management company, released its “Baron Emerging Markets Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund returned 2.50% (Institutional Shares) compared to a 2.37% return for the MSCI EM Index (primary benchmark Index) and a 2.98% gain for the MSCI EM IMI Growth Index (the Proxy Benchmark). The fund performed in line with the primary benchmark while modestly underperformed the proxy benchmark. The recent strength in equities is due to the Fed’s indication that it will proceed with multiple rate cuts this year. To know the best picks for the fund in 2024, please check the top five holdings of the fund.
Baron Emerging Markets Fund highlighted stocks like Tencent Music Entertainment Group (NYSE:TME), in the first quarter 2024 investor letter. Tencent Music Entertainment Group (NYSE:TME) operates online music entertainment platforms with a market capitalization of $25.398 billion. The one-month return of Tencent Music Entertainment Group (NYSE:TME) was 14.91%, and its shares gained 100.00% of their value over the last 52 weeks. On May 24, 2024, Tencent Music Entertainment Group (NYSE:TME) stock closed at $14.80 per share.
Baron Emerging Markets Fund stated the following regarding Tencent Music Entertainment Group (NYSE:TME) in its first quarter 2024 investor letter:
“Tencent Music Entertainment Group (NYSE:TME), a listed subsidiary of Tencent Holdings Limited, is the largest online music platform in China. The company has a dominant 70% share of music streaming and the most comprehensive library of content in China. After navigating a decline in its legacy music livestreaming business over the last few years, TME has now transitioned to a pure-play music streaming model, improving earnings quality and durability. Music streaming is still in its early stages in China, with paid penetration of only 18% and average revenue per paying user (ARPPU) of only RMB 10.7 (U.S. $1.50) per month, a fraction of global peers. As a result, we believe the company has a long runway to drive at least high-teens subscription revenue growth over the intermediate term via both user growth and increasing ARPPU, driving a doubling of earnings over the next four to five years. As the business scales and the self-produced content mix rises, TME is also poised for margin expansion, while China’s more fragmented music label landscape compared to other global markets bodes well for the company’s long-term profitability.”
Photo by wilfried Vowoto on Unsplash
In the quarter Tencent Music Entertainment Group’s (NYSE:TME) gross margin is 40.9% increased by 7.8% year-over-year, an increase of 2.6% quarter-over-quarter. Tencent Music Entertainment Group (NYSE:TME) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Tencent Music Entertainment Group (NYSE:TME) at the end of the first quarter which was 23 in the previous quarter.
In another article, we discussed Tencent Music Entertainment Group (NYSE:TME) and shared the list of unstoppable growth stocks to buy. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.
If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
