Baron Funds, an investment management company, released its “Baron Discovery Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. The fund was up 3.58% (Institutional Shares) in the second quarter trailing the Russell 2000 Growth Index’s 7.05% return. Year-to-date, the fund returned 15.19% (Institutional Shares) compared to a 13.55% return for the benchmark. The macroeconomic landscape remains complicated, and the market’s general tendency is toward fear rather than greed. Nonetheless, the firm remains hopeful that the market has bottomed and that an economic recovery is starting. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Discovery Fund highlighted stocks like GitLab Inc. (NASDAQ:GTLB) in the second quarter 2023 investor letter. Headquartered in San Francisco, California, GitLab Inc. (NASDAQ:GTLB) provides software for software development. On August 18, 2023, GitLab Inc. (NASDAQ:GTLB) stock closed at $44.36 per share. One-month return of GitLab Inc. (NASDAQ:GTLB) was -11.28%, and its shares lost 27.36% of their value over the last 52 weeks. GitLab Inc. (NASDAQ:GTLB) has a market capitalization of $6.778 billion.
Baron Discovery Fund made the following comment about GitLab Inc. (NASDAQ:GTLB) in its second quarter 2023 investor letter:
“GitLab Inc. (NASDAQ:GTLB) is an end-to-end software development and IT operations platform that enterprises use to create, test, secure, and deploy code. Shares rebounded this quarter after GitLab reported solid financial results, with revenue growth of 44% and operating margins that exceeded consensus. Growth was driven by a healthy combination of new customer wins, stabilizing seat expansions at existing customers, and higher average revenue per user due to price increases in GitLab’s Premium Tier and upsells to its Ultimate Tier, as customers upgrade to advanced developer security and compliance features. GitLab also continued to deliver rapid product innovation thanks to its strong engineering team and the large community of external developers that contribute to its open-source platform. The company announced 10 new AI applications that will help developers write code automatically, generate more accurate quality tests, and detect security vulnerabilities earlier. We remain bullish on GitLab’s long-term prospects as it continues to deliver value to development teams, gain share from point solutions, and improve its unit economics.
After GitLab Inc. traded down nearly 25% in the first quarter, we increased our investment. GitLab is one of two major companies (including GitHub, which is owned by Microsoft) that provide a wide variety of software development and operations tools that allow organizations to rapidly create secure software on a collaborative basis. Shares sold off last quarter after management issued calendar year 2023 guidance that was below consensus (at about 25% growth versus the 40% that was expected).”
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GitLab Inc. (NASDAQ:GTLB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held GitLab Inc. (NASDAQ:GTLB) at the end of second quarter which was 41 in the previous quarter.
We discussed GitLab Inc. (NASDAQ:GTLB) in another article and shared the list of best meme stocks to buy. 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.
