Baron Funds, an investment management company, released its “Baron Real Estate Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund rose 6.17% (Institutional Shares) compared to a 4.90% return for the MSCI US REIT Index (the “REIT Index”) and an 8.71% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). For 2022, the fund declined 28.44% compared to a 23.84% decline for the MSCI Real Estate Index and a 25.37% decline for the REIT Index. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Funds highlighted stocks like D.R. Horton, Inc. (NYSE:DHI) in the Q4 2022 investor letter. Headquartered in Arlington, Texas, D.R. Horton, Inc. (NYSE:DHI) is a home-building company. On January 31, 2023, D.R. Horton, Inc. (NYSE:DHI) stock closed at $98.69 per share. One-month return of D.R. Horton, Inc. (NYSE:DHI) was 7.69%, and its shares gained 8.63% of their value over the last 52 weeks. D.R. Horton, Inc. (NYSE:DHI) has a market capitalization of $33.889 billion.
Baron Funds made the following comment about D.R. Horton, Inc. (NYSE:DHI) in its Q4 2022 investor letter:
“The shares of D.R. Horton, Inc. (NYSE:DHI), the number one homebuilder by volume in the U.S., gained 31% in the most recent quarter following strong business results.
We are bullish about the long-term prospects for D.R. Horton primarily due to two key considerations:
1) We believe the company is positioned to perform well over time given its status as the largest and lowest-cost producer in the entrylevel home segment for first-time buyers and baby boomers looking for an affordable home. In the last fiscal year, approximately 67% of D.R. Horton’s home sales were for prices less than $400,000, thereby enabling the company to satisfy the home affordability constraints of many potential home buyers.
2) We are enthusiastic about D.R. Horton’s continued transition to a stronger and more asset-light balance sheet by outsourcing its land development spending needs to third-party developers such as Forestar Group Inc. D.R. Horton’s transition to a less capital-intensive business model is leading to stronger cash-flow generation, lower debt levels, an ability to pursue more share repurchases and/or other investment opportunities, and a higher-valuation multiple.”
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D.R. Horton, Inc. (NYSE:DHI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held D.R. Horton, Inc. (NYSE:DHI) at the end of the third quarter, which was 44 in the previous quarter.
We discussed D.R. Horton, Inc. (NYSE:DHI) in another article and shared the list of top lowest P/E ratios of the S&P 500. In addition, please check out our hedge fund investor letters Q4 2022 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.
