Baron Funds, an asset management firm, published its “Baron Focused Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron Focused Growth Fund (the “Fund”) declined 8.03% (Institutional Shares) in the quarter ended March 31, 2022. The Fund’s primary benchmark, the Russell 2500 Growth Index (the “Index”), fell 12.30% in the period. The S&P 500 Index, which measures the performance of large-cap companies, fell 4.60%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Baron Focused Growth Fund mentioned Hyatt Hotels Corporation (NYSE:H) and explained its insights for the company. Founded in 1957, Hyatt Hotels Corporation (NYSE:H) is a Chicago, Illinois-based multinational hospitality company with a $9.0 billion market capitalization. Hyatt Hotels Corporation (NYSE:H) delivered a -14.56% return since the beginning of the year, while its 12-month returns are down by -1.62%. The stock closed at $81.94 per share on June 15, 2022.
Here is what Baron Focused Growth Fund has to say about Hyatt Hotels Corporation (NYSE:H) in its Q1 2022 investor letter:
“The Fund’s portfolio companies that have pricing power to combat inflation such as Hyatt Hotels Corp. (NYSE:H) performed well in the period. Hyatt was a relative outperformer in the quarter and declined just 0.5%. The strong relative performance was in part because the company has important attributes that make it a good hedge against inflation. This is since Hyatt is able to reprice its rooms on a daily basis. This should lead to stronger margins as management expects hotel-level margins to be between 100 basis points and 300 basis points above pre-COVID levels. As a result, the company should generate strong free cash flow that, coupled with cash proceeds from asset sales, can use to pay down the debt taken on to complete its acquisition of Apple Leisure Group. Hyatt still has a strong balance sheet since the start of the COVID pandemic. Hyatt’s balance sheet, cash flow, and further asset sales will enable the company to restart a return of capital program by the end of the year. We think its pivot to an increasingly asset-light business with an improved balance sheet and cash flow profile should also result in more stable earnings that could result in multiple expansion over time.”
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Our calculations show that Hyatt Hotels Corporation (NYSE:H) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Hyatt Hotels Corporation (NYSE:H) was in 42 hedge fund portfolios at the end of the first quarter of 2022, compared to 38 funds in the previous quarter. Hyatt Hotels Corporation (NYSE:H) delivered a -12.88% return in the past 3 months.
In March 2022, we also shared another hedge fund’s views on Hyatt Hotels Corporation (NYSE:H) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
