Baron Funds, an investment management company, released its “Baron Asset Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. U.S. equities continued their upward trend in the second consecutive quarter. The rise was led by the outsized performance of a few large technology companies, partly driven by the hype surrounding their potential benefits from the widespread adoption of artificial intelligence (AI). Against this backdrop, the Baron Asset Fund increased by 3.63% (Institutional Shares) trailing Russell Midcap Growth Index’s 6.23% returns. The underperformance of certain stocks affected the fund in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Asset Fund highlighted stocks like Ceridian HCM Holding Inc. (NYSE:CDAY) in the second quarter 2023 investor letter. Headquartered in Minneapolis, Minnesota, Ceridian HCM Holding Inc. (NYSE:CDAY) is a human capital management software company. On July 27, 2023, Ceridian HCM Holding Inc. (NYSE:CDAY) stock closed at $70.01 per share. One-month return of Ceridian HCM Holding Inc. (NYSE:CDAY) was 4.54%, and its shares gained 27.83% of their value over the last 52 weeks. Ceridian HCM Holding Inc. (NYSE:CDAY) has a market capitalization of $10.854 billion.
Baron Asset Fund made the following comment about Ceridian HCM Holding Inc. (NYSE:CDAY) in its second quarter 2023 investor letter:
“During the quarter, adverse stock selection in IT contributed to the Fund’s relative shortfall. Weakness in the sector came from the Fund’s application software holdings, namely Ceridian HCM Holding Inc. (NYSE:CDAY) and Guidewire Software, Inc., which are market leaders in their respective verticals of human capital management (HCM) and insurance software. Ceridian’s stock fell on investor concerns that a potential economic downturn could impact its revenue growth. While Ceridian has some direct exposure to overall employment levels, the company also benefits from powerful secular trends surrounding the modernization of HCM software and increasing adoption of SaaS solutions in this market. We believe Ceridian can continue to grow in excess of 20%, helped by continued market share gains, a move to larger-size customers, traction in international markets, and success in cross-selling additional modules to its existing customers. We expect Ceridian’s growth to be enhanced by its Wallet suite (a product that allows employees to access their pay more quickly) as well as higher interest rates, which benefits the amount earned on the company’s float income.”
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Ceridian HCM Holding Inc. (NYSE:CDAY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Ceridian HCM Holding Inc. (NYSE:CDAY) at the end of first quarter which was 22 in the previous quarter.
We discussed Ceridian HCM Holding Inc. (NYSE:CDAY) in another article and shared the list of biggest payroll companies in the US. In addition, please check out our hedge fund investor letters Q2 2023 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.
