Baron Funds, an investment management firm, released its “Baron Durable Advantage Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund advanced 10.9% (Institutional Shares) in the first quarter compared to a 10.6% return for the Fund’s benchmark, the S&P 500 Index. The strong US economy led the fund’s quarterly gains. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Baron Durable Advantage Fund highlighted stocks like Adobe Inc. (NASDAQ:ADBE), in the first quarter 2024 investor letter. Adobe Inc. (NASDAQ:ADBE) is a diversified software company that operates through Digital Media, Digital Experience, and Publishing and Advertising. The one-month return of Adobe Inc. (NASDAQ:ADBE) was -9.89% and its shares gained 2.44% of their value over the last 52 weeks. On May 31, 2024, Adobe Inc. (NASDAQ:ADBE) stock closed at $444.76 per share with a market capitalization of $199.252 billion.
Baron Durable Advantage Fund stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its first quarter 2024 investor letter:
“Adobe Inc. (NASDAQ:ADBE) is a leading developer of marketing, publishing, and graphics software. Shares declined 15.6% during the quarter after the company reported annual recurring revenue that surpassed its initial guidance but fell short of buy-side expectations by $20 million to $25 million. This shortfall raised investor concerns that Adobe may need a faster ramp in the second half of the fiscal year to hit its annual guidance. We have conviction that Adobe can meet or exceed its guidance thanks to: 1) expansion of price increases to additional regions as well as heightened renewals in the second half of the year, and easier year-over-year comparisons due to the dissipation of headwinds from 2022’s price increases; 2) incremental monetization from GenAI’s new offerings, particularly within enterprise-focused solutions like GenStudio and Firefly, which are gaining traction; and 3) introducing new solutions, including upcoming Document Intelligence add-on capabilities. While investors remain focused on the short term, we believe Adobe is a leading creative and marketing franchise with an exciting innovation cycle ahead, poised to optimize its extensive user base, expand its opportunity, and benefit from GenAI trends. We believe the stock’s decline is overdone as more than 100% of the decline was driven by multiple contraction, even though the company’s 2024 EPS estimates increased slightly (by 0.3% during the quarter) and the company’s intrinsic value has not materially changed.”
A team of engineers and scientists collaborating at a workstation surrounded by their applications and solutions.
Adobe Inc. (NASDAQ:ADBE) is in 13th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 108 hedge fund portfolios held Adobe Inc. (NASDAQ:ADBE) at the end of the first quarter which was 105 in the previous quarter. Adobe Inc. (NASDAQ:ADBE) generated $5.18 billion in revenue in the first quarter, up 12% year-over-year.
In another article, we discussed Adobe Inc. (NASDAQ:ADBE) and shared RiverPark Large Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2024 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.
