Baron Funds, an investment management company, released its “Baron Small Cap Fund” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned 9.68% (Institutional Shares) in the quarter outperforming the Russell 2000 Growth Index’s 8.41% return and the broader Russell 3000 Index’s 6.23% return. For the first nine months of 2024, the Fund is up 14.74% compared to 13.22% and 20.63% returns for the indexes. In contrast to the narrow market leadership of previous periods, the market rally during the quarter saw strong performance across a broad range of sectors and market capitalization. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Small Cap Fund highlighted stocks like Loar Holdings Inc. (NYSE:LOAR) in its Q3 2024 investor letter. Loar Holdings Inc. (NYSE:LOAR) designs, manufactures, and markets aerospace and defense components. The one-month return of Loar Holdings Inc. (NYSE:LOAR) was 9.98%, and its shares gained 29.77% of their value over the last three months. On November 20, 2024, Loar Holdings Inc. (NYSE:LOAR) stock closed at $88.06 per share with a market capitalization of $7.899 billion.
Baron Small Cap Fund stated the following regarding Loar Holdings Inc. (NYSE:LOAR) in its Q3 2024 investor letter:
“Finally, we sold Loar Holdings Inc. (NYSE:LOAR) following the stocks over 150% appreciation from its IPO price of $28 in April. Trading at 45 times 2024 EBITDA and 35 times 2025 EBITDA, we believe that a material portion of future gains have been pulled forward even with the assumption of a significant amount of M&A and organic growth estimated in coming years.”
A skilled machinist inspecting a precision bearing for a aerospace/defense application.
Loar Holdings Inc. (NYSE:LOAR) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held Loar Holdings Inc. (NYSE:LOAR) at the end of the third quarter which was 24 in the previous quarter. While we acknowledge the potential of Loar Holdings Inc. (NYSE:LOAR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Loar Holdings Inc. (NYSE:LOAR) and shared TimesSquare Capital Management U.S. Small Cap Growth Strategy’s views on the company in the previous quarter. Baron Small Cap Fund initiated a position in Loar Holdings Inc. (NYSE:LOAR) as part of the company’s IPO. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.