Baron Funds: “Sunstone Hotel (SHO) is Valued at Steep Discounts”

Baron Funds, an asset management company, released its “Baron Real Estate Income Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. Baron Real Estate Income Fund (the “Fund”) declined 18.43% (Institutional Shares) in the second quarter of 2022, modestly underperforming its primary benchmark, the MSCI US REIT Index (the “REIT Index”), which declined 17.16%. 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 Real Estate Income Fund mentioned Sunstone Hotel Investors, Inc. (NYSE:SHO) and explained its insights for the company. Founded in 1995, Sunstone Hotel Investors, Inc. (NYSE:SHO) is an Irvine, California-based real estate investment trust company with a $2.3 billion market capitalization. Sunstone Hotel Investors, Inc. (NYSE:SHO) delivered a -5.88% return since the beginning of the year, while its 12-month returns are down by -7.54%. The stock closed at $11.04 per share on September 16, 2022.

Here is what Baron Real Estate Income Fund has to say about Sunstone Hotel Investors, Inc. (NYSE:SHO) in its Q2 2022 investor letter:

“Exceptionally strong leisure demand and the resumption of business travel are contributing to robust business fundamentals for the Fund’s hotel REIT investment in Sunstone Hotel Investors, Inc. (NYSE:SHO). Given that economic worries have now emerged, we are closely monitoring business fundamentals and our hotel REIT investments. At their current share prices, however, we believe the company is valued at steep discounts to replacement cost and our assessment of intrinsic value.”

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Our calculations show that Sunstone Hotel Investors, Inc. (NYSE:SHO) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Sunstone Hotel Investors, Inc. (NYSE:SHO) was in 18 hedge fund portfolios at the end of the second quarter of 2022, compared to 25 funds in the previous quarter. Sunstone Hotel Investors, Inc. (NYSE:SHO) delivered a 11.07% return in the past 3 months.

In October 2021, we also shared another hedge fund’s views on Sunstone Hotel Investors, Inc. (NYSE:SHO) in 11 Best Hotel Stocks To Invest In. 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.