Baron Funds, an asset management firm, published its “Baron Small Cap Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of 4.69% was delivered by the fund’s institutional shares for the fourth quarter of 2021 and 15.84% for the year. This well exceeded the returns of the Russell 2000 Growth Index (the “Index”), which was flat in the fourth quarter and up 2.83% for the year. This was a quarter and a year where small-cap stocks did worse than large caps. The S&P 500 Index gained 11.03% in the quarter and 28.71% for the year. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Baron Small Cap Fund, in its Q4 2021 investor letter, mentioned ICON Public Limited Company (NASDAQ: ICLR) and discussed its stance on the firm. ICON Public Limited Company is a Dublin, Ireland-based clinical research organization company with a $20.8 billion market capitalization. ICLR delivered a -15.54% return since the beginning of the year, while its 12-month returns are up by 24.24%. The stock closed at $261.56 per share on February 11, 2022.
Here is what Baron Small Cap Fund has to say about ICON Public Limited Company in its Q4 2021 investor letter:
“Shares of ICON Plc, a leading global contract research organization (“CRO”) providing drug development support to pharmaceutical and biotechnology companies, rose this quarter after reporting strong results and commenting favorably about the integration of the merger with PRA Health Sciences. Revenues and profits beat Street estimates, and the company raised its guidance. The company reported record net business wins, a healthy book-to-bill ratio of 1.27, and a record closing backlog which is up 14% on a proforma basis. There has been no evidence of post-merger disruption; just the opposite, as management has detailed why the businesses are “better together.” We foresee years of strong revenue growth, as the CRO industry is expected to grow at a mid-single-digit pace, and ICON should continue to take share. There is plenty of opportunity for margin improvement. We expect significant free cash flow generation, resulting in a balance sheet that will be modestly levered in a year. Go forward, we believe the company can compound its EBITDA at 15% and earnings around 20%, and maintain its present multiple.”
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Our calculations show that ICON Public Limited Company (NASDAQ: ICLR) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. ICLR was in 35 hedge fund portfolios at the end of the third quarter of 2021, compared to 39 funds in the previous quarter. ICON Public Limited Company (NASDAQ: ICLR) delivered a -8.40% return in the past 3 months.
In December 2021, we also shared another hedge fund’s views on ICLR in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
