Baron Funds, an asset management firm, published its “Baron Small Cap Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron Small Cap Fund (the “Fund”) did poorly in the first quarter, on both an absolute and relative basis. The Fund was down 15.68% (Institutional Shares), trailing the Russell 2000 Growth Index, which lost 12.63%, and the S&P 500 Index, which fell 4.60%. The Fund’s longer-term performance is still admirable gaining 10.76% per year, on an annualized basis, over its almost 25-year history and besting the returns of its benchmark index for all relevant time periods. 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 Small Cap Fund mentioned SiteOne Landscape Supply, Inc. (NYSE:SITE) and explained its insights for the company. Founded in 2001, SiteOne Landscape Supply, Inc. (NYSE:SITE) is a Roswell, Georgia-based landscape supplies distributor with a $5.6 billion market capitalization. SiteOne Landscape Supply, Inc. (NYSE:SITE) delivered a -48.15% return since the beginning of the year, while its 12-month returns are down by -27.93%. The stock closed at $125.63 per share on May 20, 2022.
Here is what Baron Small Cap Fund has to say about SiteOne Landscape Supply, Inc. (NYSE:SITE) in its Q1 2022 investor letter:
“Shares of SiteOne Landscape Supply, Inc. (NYSE:SITE), the largest distributor of wholesale landscape supplies, fell for similar reason as Floor & Decor…. concern about the possible impact of rising interest rates and multiple compression. The company reported strong results and had a blowout year in 2021…organic revenue growth of 20%, EBITDA growth of 60%, and free cash flow per share up 90%. SiteOne, too, is projecting more modest growth this year against the tough comparisons and flat margins after superb cost management last year. Maybe growth will be slower than expected this year because of the macro environment…maybe… but the stock has traded to a valuation level that is a discount to where we think it should trade on our estimates for 2022 results. We think this is a special company and management team. We think EBITDA will grow at about 15% a year from this base through organic growth and acquisitions, and the company will generate significant free cash flow to fund future growth.”
Our calculations show that SiteOne Landscape Supply, Inc. (NYSE:SITE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. SiteOne Landscape Supply, Inc. (NYSE:SITE) was in 22 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 15 funds in the previous quarter. SiteOne Landscape Supply, Inc. (NYSE:SITE) delivered a -24.23% return in the past 3 months.
In February 2022, we also shared another hedge fund’s views on SiteOne Landscape Supply, Inc. (NYSE:SITE) 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.
