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 Vail Resorts, Inc. (NYSE:MTN) and explained its insights for the company. Founded in 1997, Vail Resorts, Inc. (NYSE:MTN) is a Broomfield, Colorado-based mountain resort company with a $9.7 billion market capitalization. Vail Resorts, Inc. (NYSE:MTN) delivered a -26.83% return since the beginning of the year, while its 12-month returns are down by -25.18%. The stock closed at $239.93 per share on May 23, 2022.
Here is what Baron Real Estate Fund has to say about Vail Resorts, Inc. (NYSE:MTN) in its Q1 2022 investor letter:
“We have been monitoring and researching Vail Resorts, Inc. for several months. Following a steep correction in its share price from a peak of $376 in November 2021, we acquired shares approximately $100 lower at an average cost basis of $276 per share. The company has assembled an irreplaceable portfolio of mountain resorts that include Vail, Beaver Creek, Breckinridge, Park City, Whistler Blackcomb, and Keystone. We believe Vail’s long-term prospects will be supported by attractive supply and demand trends (e.g., no new ski resorts, strong consumer demand for outdoor experiences versus goods), strong pricing power and free cash flow generation, a customer advance commitment strategy that leads to recurring cash flows and financial stability even if weather and macroeconomic conditions change, and strategic acquisitions. After peaking at a valuation of approximately 18 to 20 times cash flow (its long-term average is approximately 15 times cash flow), we believe Vail’s shares are now attractively valued at approximately 13 times cash flow and offer prospects for compelling returns over the next few years.”
Credit: Park Hotels & Resorts
Our calculations show that Vail Resorts, Inc. (NYSE:MTN) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Vail Resorts, Inc. (NYSE:MTN) was in 44 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 40 funds in the previous quarter. Vail Resorts, Inc. (NYSE:MTN) delivered a -9.80% return in the past 3 months.
In March 2021, we also shared another hedge fund’s views on Vail Resorts, Inc. (NYSE:MTN) 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.
