Baron Funds: “Public Storage (PSA)’s Shares are Currently Valued at a Discount”

Baron Funds, an asset management firm, published its “Baron Real Estate Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. The Baron Real Estate Fund (the “Fund”) declined 10.76% (Institutional Shares) in the first quarter of 2022, modestly outperforming its primary benchmark, the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”), which declined 11.03%. The Fund underperformed the MSCI US REIT Index (the “REIT Index”), which declined 4.28%. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Baron Real Estate Fund mentioned Public Storage (NYSE:PSA) and explained its insights for the company. Founded in 1972, Public Storage (NYSE:PSA) is a Glendale, California-based international self-storage company with a $56.3 billion market capitalization. Public Storage (NYSE:PSA) delivered a -14.54% return since the beginning of the year, while its 12-month returns are up by 14.96%. The stock closed at $320.10 per share on May 23, 2022.

Here is what Baron Real Estate Fund has to say about Public Storage (NYSE:PSA) in its Q1 2022 investor letter:

“Public Storage Incorporated is a REIT that is the world’s largest owner, operator, and developer of self-storage facilities. The company’s nearly 2,500 self-storage facilities across the U.S. serve more than one million customers. The company has achieved the number one market position in 14 of its top 15 markets and the leading brand among consumers. We are encouraged about the company’s prospects due to our expectations for the continuation of strong occupancy and rent trends, limited new supply, mid-teens organic cash flow growth, the potential for mergers and acquisitions activity in part due to the company’s well-capitalized and low leverage balance sheet, and the ability to increase rents monthly to combat inflation headwinds. We believe Public Storage’s shares are currently valued at a discount to private market self-storage values and offer prospects for mid-teens total returns over the next few years.”

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Our calculations show that Public Storage (NYSE:PSA) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Public Storage (NYSE:PSA) was in 33 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 35 funds in the previous quarter. Public Storage (NYSE:PSA) delivered a -6.83% return in the past 3 months.

In January 2021, we also shared another hedge fund’s views on Public Storage (NYSE:PSA) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.