Baron Funds, an investment management firm, released its “Focused Growth Fund” second quarter 2023 investor letter, a copy of which can be downloaded here. The fund advanced 7.38% (Institutional Shares) in the second quarter. The fund’s primary benchmark rose 6.41% during the same period and the S&P 500 Index, increased 8.74%. The fund’s Core Growth and Disruptive Growth companies led the strong performance of the fund in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Baron Focused Growth Fund highlighted stocks like FIGS, Inc. (NYSE:FIGS) in the Q2 2023 investor letter. Headquartered in Santa Monica, California, FIGS, Inc. (NYSE:FIGS) is a US-based healthcare apparel and lifestyle company. On September 11, 2023, FIGS, Inc. (NYSE:FIGS) stock closed at $5.58 per share. One-month return of FIGS, Inc. (NYSE:FIGS) was -21.07%, and its shares lost 50.71% of their value over the last 52 weeks. FIGS, Inc. (NYSE:FIGS) has a market capitalization of $940.04 million.
Baron Focused Growth Fund made the following comment about FIGS, Inc. (NYSE:FIGS) in its Q2 2023 investor letter:
“FIGS, Inc. (NYSE:FIGS) is a direct-to-consumer apparel and lifestyle brand dedicated to the health care community. Shares outperformed during the quarter after reporting stronger-than-expected quarterly results. Revenue growth and profitability exceeded consensus estimates. Active customers grew more than 20%, a testament to strong consumer demand for the brand. Margins were also solid despite a more promotional apparel environment. We continue to believe FIGS has a long growth runway as its strong brand and route-to-market strategy create durable competitive advantages.
FIGS’ 33.6% share price increase in the quarter added 107 bps to the Fund’s performance. The company’s strong customer additions continued with record website reactivations. FIGS’ current above normal promotions will help reduce inventory levels substantially for the balance of the year. The company’s inventory build-up over the past 18 months due to supply-chain concerns had been a large user of cash. We believe the company has a large growth opportunity selling its medical customers non-scrubs outerwear and underwear. It also should achieve greater international penetration and increase its customer base through extended size offerings. The company continues to expand brand awareness with digital marketing. Its international business is in its infancy with initial strong results in the U.K. and Canada. FIGS’ direct-to-consumer model for its health care uniform business with replenishment characteristics, strong brand, and superior quality provide durable competitive advantages. We expect FIGS to continue to gain share in the $80 billion global health care apparel market. We believe the company could double its revenue over the next three years with EBITDA margins that ultimately could exceed 20%.”
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FIGS, Inc. (NYSE:FIGS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held FIGS, Inc. (NYSE:FIGS) at the end of second quarter which was 18 in the previous quarter.
We discussed FIGS, Inc. (NYSE:FIGS) in another article and shared Baron Focused Growth Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2023 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.
