Baron Funds, an asset management firm, published its “Baron Global Advantage Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron Global Advantage Fund (the “Fund”) declined 22.8% (Institutional Shares), during the first quarter, compared to the 5.4% loss for the MSCI ACWI Index (the “Index”), and the 9.7% loss for the MSCI ACWI Growth Index, the Fund’s benchmarks. 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 Global Advantage Fund mentioned Snowflake Inc. (NYSE:SNOW) and explained its insights for the company. Founded in 2012, Snowflake Inc. (NYSE:SNOW) is a Bozeman, Montana-based cloud computing-based data warehousing company with a $55.9 billion market capitalization. Snowflake Inc. (NYSE:SNOW) delivered a -47.52% return since the beginning of the year, while its 12-month returns are down by -20.53%. The stock closed at $177.76 per share on May 02, 2022.
Here is what Baron Global Advantage Fund has to say about Snowflake Inc. (NYSE:SNOW) in its Q1 2022 investor letter:
“Snowflake grew revenues…106% (to $1.2 billion — while new bookings in the fourth quarter alone were $1.2 billion in contract value) with 12% margins. The stock was down 32% in the first quarter. We believe that these companies, along with many others that we own, are the long-term beneficiaries of digital transformation, a multi-decade paradigm shift sweeping global economies today. Frank Slootman, Snowflake’s CEO, explained it this way in his most recent earnings call with investors:
“Snowflake’s growth is driven by digital transformation and long-term secular trends in data science and analytics, enabled by cloud-scale computing and Snowflake’s cloud-native architecture. Snowflake is a single data operations platform that addresses a broad spectrum of workload types and incredible performance economy and governance. As a platform, Snowflake enables the data cloud, a world without silos and the promise of unfettered data science.”
In plain English it means that we want to make better decisions and we have all this data available to us. Snowflake will enable businesses to utilize all their data to improve their decision-making.
Snowflake Inc. provides a data platform for large-scale data analytics. Shares fell 32% during the first quarter despite reporting strong results, finishing 2021 with 106% year-over-year revenue growth, while booking $1.2 billion of new business in the fourth quarter alone. Shares declined due to the rotation out of fast-growing long-duration stocks as well as concerns over the company’s newly introduced infrastructure improvements, which make customers more efficient in using the Snowflake platform (lowering cost on a per usage basis). While some investors viewed that negatively due to the near-term impact on usage-based revenues, we see this as a positive development, since putting customers first tends to create a lot of value over the long term. We believe that by reducing costs to customers, they will migrate more workloads to Snowflake, making the company better positioned to capture a bigger portion of its large market opportunity and extending its technology leadership over competitors. We remain excited about Snowflake’s best-in-class growth at scale with favorable unit economics, addressing one of the largest opportunities in technology.”
Our calculations show that Snowflake Inc. (NYSE:SNOW) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Snowflake Inc. (NYSE:SNOW) was in 84 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 73 funds in the previous quarter. Snowflake Inc. (NYSE:SNOW) delivered a -35.57% return in the past 3 months.
In January 2022, we also shared another hedge fund’s views on Snowflake Inc. (NYSE:SNOW) 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.
