Baron Funds, an investment management company, released its “Baron Small Cap Fund” fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. The fund was 4.24% up in the fourth quarter compared to a 4.13% return for the Russell 2000 Growth Index and a 7.56% return for the S&P 500 Index. For 2022, the fund was down 31.05% compared to a 26.36% fall for the Russell 2000 Growth Index and an 18.11% decline for the S&P 500 Index. Inflation and aggressive fed tightening impacted the fund’s performance in 2022. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Small Cap Fund highlighted stocks like Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) in its Q4 2022 investor letter. Headquartered in San Ramon, California, Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) is an enterprise-level digital transformation services provider. On February 16, 2023, Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) stock closed at $12.71 per share. One-month return of Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) was 6.63% and its shares lost 35.97% of their value over the last 52 weeks. Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) has a market capitalization of $940.527 million.
Baron Small Cap Fund made the following comment about Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) in its Q4 2022 investor letter:
“Shares of Grid Dynamics Holdings, Inc. (NASDAQ:GDYN), a fast-growing provider of digital transformation services, fell this quarter as the company trimmed its earnings guidance and shares of technology service companies declined in general, continuing the wild ride for the stock over 2022. With many of its engineers located in Ukraine, the stock got crushed when war broke out and concerns emerged as to whether Grid would be able to meet demand in the short term and maintain its clientele longer term. Well, management did an incredible job protecting and supporting its employees. We expect revenues to grow 40% organically in 2022, which is remarkable. However, this quarter demand for digital transformation services has softened along with a global macro slowdown in technology spending. This resulted in the company projecting slower growth in the near term. Also, the company sold stock during the quarter to have the capital to make acquisitions and expand its engineering base to new geographies, but it passed on some of the deals on the table after further diligence. We believe that Grid has strong technical capabilities, great management, and operates in a segment with great tailwinds. We buy into their goal of strong growth and becoming a $1 billion-plus revenue company, a three-fold increase from current levels.”
Photo by mahdis mousavi on Unsplash
Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) at the end of the third quarter, which was 13 in the previous quarter.
We discussed Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) in another article and shared the list of high growth IT stocks to buy. In addition, please check out our hedge fund investor letters Q4 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.
