Baron Funds, an asset management firm, published its “Baron Small Cap Fund” second quarter 2022 investor letter – a copy of which can be downloaded here. Baron Small Cap Fund (the “Fund”) was down 18.60% (Institutional Shares) in the second quarter. The Fund modestly outperformed the Russell 2000 Growth Index, which was down 19.25% for the period, but lagged the S&P 500 Index, which was down 16.10%. Year-to-date, the Fund is down 31.36%, which trailed the Russell 2000 Growth Index and the S&P 500 Index, which were down 29.45% and 19.96%, respectively. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Baron Small Cap Fund mentioned Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) and explained its insights for the company. Founded in 2006, Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) is a San Ramon, California-based digital-native technology services company with a $1.3 billion market capitalization. Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) delivered a -47.75% return since the beginning of the year, while its 12-month returns are down by -33.69%. The stock closed at $19.84 per share on September 09, 2022.
Here is what Baron Small Cap Fund has to say about Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) in its Q2 2022 investor letter:
“Grid Dynamics Holdings, Inc. is a pure play Information Technology (IT) service provider focused on digital transformation. Grid employs a highly skilled, competitively priced workforce, which was primarily located in Ukraine and Russia. When war broke out, the stock collapsed over fears of a catastrophic effect on Grid’s business. However, the company has weathered the storm masterfully… supporting and relocating its Ukrainian engineers and their families, shuttering operations in Russia, growing its footprint in other countries in Eastern Europe, and opening new offices in India and Mexico.
The company reported strong earnings and outlook. Demand for its services has remained strong, and its operational resilience has been herculean. We expect the company will grow its revenues by over 20% organically, though margins will be lower because of the incremental expenses to reshuffle the workforce. The company is back on track to build a billion-dollar revenue, highly profitable entity that we believe will be worth multiple fold of its current value. We tip our hat to the management team for its skill in building the company and its heart in taking care of its employees.”
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Our calculations show that Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) was in 13 hedge fund portfolios at the end of the second quarter of 2022, compared to 18 funds in the previous quarter. Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) delivered a 14.81% return in the past 3 months.
In June 2022, we also shared another hedge fund’s views on Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
