Baron Funds, an investment management company, released its “Baron Real Estate Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund declined 4.86% (Institutional Shares) compared to a 4.99% decline for its primary benchmark, the MSCI USA IMI Extended Real Estate Index. At the same time, the fund outperformed the MSCI US REIT Index, which fell 10.28% in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Funds highlighted stocks like Pool Corporation (NASDAQ:POOL) in the Q3 2022 investor letter. Headquartered in Covington, Louisiana, Pool Corporation (NASDAQ:POOL) is a swimming pool supplies, equipment, and related leisure products distributor. On November 21, 2022, Pool Corporation (NASDAQ:POOL) stock closed at $320.24 per share. One-month return of Pool Corporation (NASDAQ:POOL) was 7.27% and its shares lost 42.97% of their value over the last 52 weeks. Pool Corporation (NASDAQ:POOL) has a market capitalization of $12.506 billion.
Baron Funds made the following comment about Pool Corporation (NASDAQ:POOL) in its Q3 2022 investor letter:
“Pool Corporation (NASDAQ:POOL) is the world’s largest distributor of swimming pool supplies, equipment, and related leisure products and is also one of the top three distributors of irrigation and landscape suppliers in the U.S. The company sells over 200,000 products from over 2,200 suppliers to over 120,000 professional contract and retailer customers through its 400-plus sales centers across 12 countries, with 70% of its transactions occurring in person. Within its core pool category, Pool has strong market share and is bigger than its next fifty competitors combined, giving Pool a strong scale advantage and allowing the company to invest in its products, technology, customer service, and supply chain to differentiate itself. Over 60% of Pool’s revenues come from maintenance and repair of existing pools, providing Pool with a large and growing recurring revenue base as more pools are built each year.
Pool has a long history of delivering organic and inorganic growth supported by the recurring nature of most of its revenues while consistently taking market share each year. We believe management will continue to deliver on its growth targets as the company today benefits from favorable U.S. population migration trends and demographic shifts (de-urbanization, southern migration), an aging pool installed base, an increasing number of new features, and technology content both in and around the pool. Pool also recently acquired Porpoise Pool & Patio, which includes a retail store franchise business and chemical packaging operation, enabling new sales and margin growth opportunities for the business.
As the stock sold off on fears of a housing-related slowdown in the pool industry, we accumulated additional shares of this best-in-class company as we believe the current share price is attractive relative to the long-term growth opportunity and value of the business.”
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Pool Corporation (NASDAQ:POOL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Pool Corporation (NASDAQ:POOL) at the end of the third quarter which was 40 in the previous quarter.
We discussed Pool Corporation (NASDAQ:POOL) in another article and shared Wedgewood Partners’ views on the company. In addition, please check out our hedge fund investor letters Q3 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.
