Do You Think Acquisition of Software Assets Will Accelerate the Growth of Aspen Technology (AZPN)?

Baron Funds, an investment management company, released its “Baron Small Cap Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund declined 3.64% (Institutional Shares), underperforming the Russell 2000 Growth Index, which was 0.24% up, and outperforming the S&P 500 Index, which was 4.88% down. In addition, please check the fund’s top five holdings to know its best picks in 2022.

Baron Funds discussed stocks like Aspen Technology, Inc. (NASDAQ:AZPN) in its Q3 2022 investor letter. Headquartered in Bedford, Massachusetts, Aspen Technology, Inc. (NASDAQ:AZPN) is an asset management software provider. On October 31, 2022, Aspen Technology, Inc. (NASDAQ:AZPN) stock closed at $241.45 per share. One-month return of Aspen Technology, Inc. (NASDAQ:AZPN) was -3.44% and its three months return was 16.17%. Aspen Technology, Inc. (NASDAQ:AZPN) has a market capitalization of $15.581 billion.

Here is what Baron Funds specifically said about Aspen Technology, Inc. (NASDAQ:AZPN) in its Q3 2022 investor letter:

“Aspen Technology, Inc. (NASDAQ:AZPN), a leader in process automation software, completed the transformational acquisition of software assets from Emerson Electric and posted strong results. The stock rose as a result. Annual spending in the legacy Aspen business accelerated and beat guidance as end-markets remained robust. They reported that customer receptivity to the newly acquired assets is strong and integration is progressing well. The company also announced another acquisition that should be accretive to growth and margins and, in our minds, is the first of many deals we expect the new company to pursue. We expect Aspen management to improve the margins and cash flow of the acquired businesses by converting them to recurring revenue models, while leveraging Emerson’s vast sales force to improve growth rates. We added to our position in Aspen in May of this year, prior to the close of the Emerson deal and are excited about the prospects of the new entity.”

Photo by Danial Igdery on Unsplash

Aspen Technology, Inc. (NASDAQ:AZPN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held Aspen Technology, Inc. (NASDAQ:AZPN) at the end of the second quarter which was 22 in the previous quarter.

We discussed Aspen Technology, Inc. (NASDAQ:AZPN) in another article and shared Polen Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.