Baron Funds, an investment management firm, released its “Focused Growth Fund” fourth quarter 2023 investor letter, a copy of which can be downloaded here. The fund had a strong fourth quarter and increased by 9.74% (Institutional Shares) underperforming the Russell 2500 Growth Index’s (the Benchmark) 12.59% return. Spare some time to check the fund’s top 5 holdings to know more about their top bets for 2023.
Baron Focused Growth Fund featured stocks like Guidewire Software, Inc. (NYSE:GWRE) in the fourth quarter 2023 investor letter. Headquartered in San Mateo, California, Guidewire Software, Inc. (NYSE:GWRE) is a software product-providing company for P&C insurers. On March 4, 2024, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $118.78 per share. One-month return of Guidewire Software, Inc. (NYSE:GWRE) was 4.26%, and its shares gained 58.06% of their value over the last 52 weeks. Guidewire Software, Inc. (NYSE:GWRE) has a market capitalization of $9.732 billion.
Baron Focused Growth Fund stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its fourth quarter 2023 investor letter:
“The one group that outperformed the Benchmark in the fourth quarter was Core Growth, owing mostly to strong gains from IDEXX Laboratories, Inc. and Guidewire Software, Inc. (NYSE:GWRE).
Property and casualty (P&C) insurance software vendor Guidewire was up 21.2% for the quarter, adding 85 bps to performance. After a multi-year transition period, we believe the company’s cloud transition is substantially complete. We believe that cloud will be the sole path forward, with annual recurring revenue (ARR) benefiting from new customer wins and migrations of the existing customer base to InsuranceSuite Cloud. We also expect the company to shift R&D resources to product development from infrastructure investment, which will help to drive cross-sales into its sticky installed base and potentially accelerate ARR over time. We are also encouraged by Guidewire’s subscription gross margin expansion, which improved by approximately 1,600 bps in its most recently reported quarter. We believe that Guidewire will be the critical software vendor for the global P&C insurance industry, capturing 30% to 50% of its $15 billion to $30 billion total addressable market and generating margins above 40%.”
An insurance adjuster reviewing images and paperwork to process a claim.
Guidewire Software, Inc. (NYSE:GWRE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Guidewire Software, Inc. (NYSE:GWRE) was held by 33 hedge fund portfolios, up from 31 in the previous quarter, according to our database.
We discussed Guidewire Software, Inc. (NYSE:GWRE) in another article and shared Wasatch U.S. Select Fund’s views on the company. In addition, please check out our hedge fund investor letters Q4 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.
