Here’s Why Baron Funds Remain Excited in DexCom (DXCM)

Baron Funds, an asset management firm, published its “Baron Small Cap Fund” second quarter 2022 investor letter – a copy of which can be downloaded here. Baron Small Cap Fund (the “Fund”) was down 18.60% (Institutional Shares) in the second quarter. The Fund modestly outperformed the Russell 2000 Growth Index, which was down 19.25% for the period, but lagged the S&P 500 Index, which was down 16.10%. Year-to-date, the Fund is down 31.36%, which trailed the Russell 2000 Growth Index and the S&P 500 Index, which were down 29.45% and 19.96%, respectively. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Baron Small Cap Fund mentioned DexCom, Inc. (NASDAQ:DXCM) and explained its insights for the company. Founded in 1999, DexCom, Inc. (NASDAQ:DXCM) is a San Diego, California-based medical device company with a $36.6 billion market capitalization. DexCom, Inc. (NASDAQ:DXCM) delivered a -29.84% return since the beginning of the year, while its 12-month returns are down by -30.29%. The stock closed at $94.18 per share on September 12, 2022.

Here is what Baron Small Cap Fund has to say about DexCom, Inc. (NASDAQ:DXCM) in its Q2 2022 investor letter:

“DexCom, Inc. is the leading provider of continuous glucose monitoring systems for patients with diabetes. The stock fell along with other premium valuation growth stocks, primarily on multiple contraction. Concern about price competition from Abbott Labs’ Libre product also played a role. Results for the first quarter were solid. Sales increased 22% organically, margins expanded 350 basis points, and the company maintained guidance for continued strong results.

An important new and revolutionary product, the G7, was approved and launched in Europe, and the company expects it to be approved in the U.S. soon. The product is 60% smaller, fully disposable, and designed for extended wear. We remain excited that CGM will become the standard of care for Type 1 diabetics and will be used extensively for Type 2 diabetics as well, which we think will be a major driver of continued sales and profit growth well into the future.”

national-cancer-institute–Ln-tYivJM4-unsplash

Our calculations show that DexCom, Inc. (NASDAQ:DXCM) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. DexCom, Inc. (NASDAQ:DXCM) was in 56 hedge fund portfolios at the end of the second quarter of 2022, compared to 58 funds in the previous quarter. DexCom, Inc. (NASDAQ:DXCM) delivered a 38.38% return in the past 3 months.

In August 2022, we also shared another hedge fund’s views on DexCom, Inc. (NASDAQ:DXCM) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.