Does Prologis (PLD) Have High Growth Prospects?

Baron Funds, an investment management company, released its “Baron Real Estate Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund declined 4.86% (Institutional Shares) compared to a 4.99% decline for its primary benchmark, the MSCI USA IMI Extended Real Estate Index. At the same time, the fund outperformed the MSCI US REIT Index, which fell 10.28% in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2022.

Baron Funds highlighted stocks like Prologis, Inc. (NYSE:PLD) in the Q3 2022 investor letter. Prologis, Inc. (NYSE:PLD) is a leader in real estate logistics. On November 18, 2022, Prologis, Inc. (NYSE:PLD) stock closed at $114.56 per share. One-month return of Prologis, Inc. (NYSE:PLD) was 5.83% and its shares lost 24.08% of their value over the last 52 weeks. Prologis, Inc. (NYSE:PLD) has a market capitalization of $105.748 billion.

Baron Funds made the following comment about Prologis, Inc. (NYSE:PLD) in its Q3 2022 investor letter:

“Prologis, Inc. (NYSE:PLD) is the world’s largest industrial REIT. The company owns a high-quality real estate portfolio that is concentrated in major global trade markets and large population centers across the Americas, Europe, and Asia. Prologis has an unmatched global platform, strong competitive advantages (scale, data, and technology), and attractive embedded growth prospects. The company is the only industrial REIT with an ‘A’ credit rating.

Following a year-to-date decline in its shares of approximately 40%, we believe Prologis’ current valuation of only 22 times cash flow (adjusted funds from operations or “AFFO”) and a 4.6% implied capitalization rate is compelling given that the company’s rents on its in-place leases are more than 50% below current market rents, thus providing a strong runway for growth in the next three to five years.

In the third quarter, we acquired additional shares of Prologis, Inc., the world’s largest industrial REIT. We are big fans of CEO Hamid Moghadam and Prologis’ management team and remain optimistic about the company’s long-term growth prospects…” (Click here to read the full text)

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Prologis, Inc. (NYSE:PLD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held Prologis, Inc. (NYSE:PLD) at the end of the third quarter, which was 49 in the previous quarter.

We discussed Prologis, Inc. (NYSE:PLD) in another article and shared the top real estate stocks to buy. In addition, please check out our hedge fund investor letters Q3 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.