Baron Funds: “We Think Vertiv (VRT) is a Very Cheap Stock”

Baron Funds, an asset management firm, published its “Baron Small Cap Fund” second quarter 2022 investor letter – a copy of which can be downloaded here. Baron Small Cap Fund (the “Fund”) was down 18.60% (Institutional Shares) in the second quarter. The Fund modestly outperformed the Russell 2000 Growth Index, which was down 19.25% for the period, but lagged the S&P 500 Index, which was down 16.10%. Year-to-date, the Fund is down 31.36%, which trailed the Russell 2000 Growth Index and the S&P 500 Index, which were down 29.45% and 19.96%, respectively. 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 Small Cap Fund mentioned Vertiv Holdings Co (NYSE:VRT) and explained its insights into the company. Founded in 2016, Vertiv Holdings Co (NYSE:VRT) is a Columbus, Ohio-based electric services company with a $5.0 billion market capitalization. Vertiv Holdings Co (NYSE:VRT) delivered a -46.22% return since the beginning of the year, while its 12-month returns are down by -43.97%. The stock closed at $13.43 per share on September 12, 2022.

Here is what Baron Small Cap Fund has to say about Vertiv Holdings Co (NYSE:VRT) in its Q2 2022 investor letter:

“Vertiv Holdings, LLC, a leading provider of critical infrastructure for data centers, fell in the quarter. The market became concerned that capital spending for data centers might be slowing along with the economy, which could be the case. If you recall, shares of Vertiv were very weak when the company reported first quarter costs were not properly passed through to their customers, so margins would fall well short of projections.

We believe that Vertiv is now ahead of the curve on this and will demonstrate robust earnings power in the back half of 2022 and into next year. We think it’s a very cheap stock, with strong management and board oversight, and remain hopeful that when the company reverts to form, the shares can appreciate significantly.”

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Our calculations show that Vertiv Holdings Co (NYSE:VRT) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Vertiv Holdings Co (NYSE:VRT) was in 34 hedge fund portfolios at the end of the second quarter of 2022, compared to 32 funds in the previous quarter. Vertiv Holdings Co (NYSE:VRT) delivered a 42.72% return in the past 3 months.

In May 2022, we also shared another hedge fund’s views on Vertiv Holdings Co (NYSE:VRT) in another article. 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.