Baron Funds, an investment management firm, released its “Baron Focused Growth Fund” first quarter 2023 investor letter, a copy of which can be downloaded here. During the quarter ending on March 31, 2023, the Fund’s Institutional Shares exhibited a notable increase of 14.49%. This remarkable performance can be attributed to the resilience and robust demand witnessed by companies held within the Fund’s portfolio. Spare some time to check the fund’s top 5 holdings to know more about their top bets for 2023.
In its Q1 2023 investor letter, Baron Focused Growth Fund mentioned Hyatt Hotels Corporation (NYSE:H) and explained its insights for the company. Founded in 1957, Hyatt Hotels Corporation (NYSE:H) is a Chicago, Illinois-based hospitality company with a $12.3 billion market capitalization. Hyatt Hotels Corporation (NYSE:H) delivered a 29.18% return since the beginning of the year, while its 12-month returns are up by 42.59%. The stock closed at $116.67 per share on June 13, 2023.
Here is what Baron Focused Growth Fund has to say about Hyatt Hotels Corporation (NYSE:H) in its Q1 2023 investor letter:
“Shares of global hotelier Hyatt increased 23.6% and helped performance by 148 bps in the first quarter. Hyatt continues to see strong growth in revenue-per-available room above pre-pandemic levels. This is driven by continued strength in its leisure business, now 50% of its room base. We believe the company’s corporate business should continue to rebound. Its group business is now running above 2019 levels. Sustained margin gains from operating improvements implemented during the pandemic should also help drive EBITDA and cash flow growth. Hyatt expects to complete its transition to an 80% fee-based business through asset sales of about $2 billion by the end of 2024. We believe Hyatt shares are significantly undervalued. While investor concern that a possible recession will result in slower or even negative growth, we believe this has been priced into its stock at current levels. So far, the company has seen no material slowdown in occupancy levels and continues to increase prices, especially on the leisure side. While leisure may be experiencing peak demand levels, management believes any slowdown in growth would be offset by the continued recovery of its group and business customers. Volumes in these segments are rapidly returning to pre-pandemic levels. Hyatt’s balance sheet and cash flow profile remain strong, which, combined with the hotel asset sales mentioned above, should result in more consistent earnings. We believe Hyatt’s multiple will increase over the next few years.”
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Our calculations show that Hyatt Hotels Corporation (NYSE:H) was not able to secure a spot on our list of the 30 Most Popular Stocks Among Hedge Funds. Hyatt Hotels Corporation (NYSE:H) was in 24 hedge fund portfolios at the end of the first quarter of 2023, compared to 27 funds in the previous quarter. Hyatt Hotels Corporation (NYSE:H) delivered a 10.30% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q1 2023 page.
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Disclosure: None. This article is originally published at Insider Monkey.
