Baron Funds, an investment management company, released its “Baron Real Estate Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. In the first quarter, the fund rose 7.07% (Institutional Shares) compared to a 2.39% return for the MSCI US REIT Index (the “REIT Index”) and a 4.73% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). The firm is optimistic about the prospects for the stock market, public real estate securities, and the fund. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Real Estate Fund highlighted stocks like Toll Brothers, Inc. (NYSE:TOL) in the first quarter 2023 investor letter. Headquartered in Fort Washington, Pennsylvania, Toll Brothers, Inc. (NYSE:TOL) designs, builds, markets, and arranges finance for detached and attached homes in residential communities. On June 26, 2023, Toll Brothers, Inc. (NYSE:TOL) stock closed at $75.87 per share. One-month return of Toll Brothers, Inc. (NYSE:TOL) was 10.76%, and its shares gained 70.00% of their value over the last 52 weeks. Toll Brothers, Inc. (NYSE:TOL) has a market capitalization of $8.296 billion.
Baron Real Estate Fund made the following comment about Toll Brothers, Inc. (NYSE:TOL) in its first quarter 2023 investor letter:
“Toll Brothers, Inc. (NYSE:TOL) is a leading luxury homebuilder in the U.S. with capable management and a large, valuable owned land real estate portfolio. Toll Brothers is more insulated than its peers from elevated mortgage rates because approximately 25% of Toll home buyers pay 100% in cash.
The company is valued at only 1.0 times tangible book value versus its long-term average of approximately 1.4 times book value and a peak multiple of approximately 2.0 times tangible book value.
The shares of homebuilding companies Toll Brothers, Inc. and Lennar Corporation performed well in the first quarter due to encouraging business activity early in 2023. As noted earlier in this letter, both companies have witnessed a meaningful uptick in demand to buy homes that started in January and appears to have continued for much of the first quarter. Homebuyers appear to be adjusting to higher mortgage rates and opting to purchase homes, in part, to fears that they could miss out on the opportunity to buy a home due to limited housing inventory and the possibility that mortgage rates could move higher. We continue to believe the shares of Toll Brothers and Lennar are attractively valued and offer strong long-term return potential.”
Copyright: alotofpeople / 123RF Stock Photo
Toll Brothers, Inc. (NYSE:TOL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Toll Brothers, Inc. (NYSE:TOL) at the end of first quarter 2023 which was 37 in the previous quarter.
We discussed Toll Brothers, Inc. (NYSE:TOL) in another article and shared the list of best home builder stocks to buy. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.
Suggested Articles:
- 16 Biggest Milk Companies in the US
- 15 Biggest Packaging Companies in the World
- 25 Best Places to Retire in the South
Disclosure: None. This article is originally published at Insider Monkey.
