Baron Funds, an investment management firm, released its “Focused Growth Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund decreased 0.21% (Institutional Shares) in the second quarter outperforming the Russell 2500 Growth Index’s (the Benchmark) 4.22% decline. It became clear throughout the quarter that the Federal Reserve’s (the Fed) restrictive actions over the previous year were starting to reduce employment, job growth, and inflation. The deceleration of economic growth gave investors hope that the Federal Reserve would begin reducing interest rates as early as this fall. Please spare some time to check the fund’s top 5 holdings to know more about their top bets for 2024.
Baron Focused Growth Fund highlighted stocks like Hyatt Hotels Corporation (NYSE:H) in the second quarter 2024 investor letter. Hyatt Hotels Corporation (NYSE:H) is a hospitality company headquartered in Chicago, Illinois. The one-month return of Hyatt Hotels Corporation (NYSE:H) was 11.34%, and its shares gained 29.90% of their value over the last 52 weeks. On September 3, 2024, Hyatt Hotels Corporation (NYSE:H) stock closed at $149.13 per share with a market capitalization of $15.241 billion.
Baron Focused Growth Fund stated the following regarding Hyatt Hotels Corporation (NYSE:H) in its Q2 2024 investor letter:
“Global hotelier Hyatt Hotels Corporation (NYSE:H) declined 4.7% in the quarter and hurt performance by 29 bps. The disappointing share price performance was due to a deceleration in growth in revenue per available room as a result of modestly slower leisure bookings. However, the company continues to increase its business transient and group bookings, which are now pacing 7% ahead of 2023 levels. These bookings are half of its business today. Robust mid-single-digit growth in units and modest margin expansion should lead to double-digit growth in EBITDA this year. In addition, Hyatt continues to sell assets in its bid to become a more asset-light business. It also has one of the strongest balance sheets in its industry today. All of the above should generate significant free cash flow that Hyatt can use to accelerate share buybacks. Hyatt has repurchased more than 80 million shares since its IPO in 2009! It now has just 100 million shares outstanding. Yet, despite 85% of Hyatt’s cash flow generated by fees, its stock still trades at a discount to peers.”
A wide angled view of an upscale lobby of a luxury hotel, capturing the warm hospitality offered to guests.
Hyatt Hotels Corporation (NYSE:H) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Hyatt Hotels Corporation (NYSE:H) at the end of the second quarter which was 28 in the previous quarter. While we acknowledge the potential of Hyatt Hotels Corporation (NYSE:H) 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.
Hyatt Hotels Corporation (NYSE:H) contributed to Baron Partners Fund’s performance last quarter, driven by improvement in its ongoing transition to a more asset-light business model. In addition, please check out our hedge fund investor letters Q2 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.
