Baron Funds, an investment management company, released its “Baron Small Cap Fund” fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. The fund was 4.24% up in the fourth quarter compared to a 4.13% return for the Russell 2000 Growth Index and a 7.56% return for the S&P 500 Index. For 2022, the fund was down 31.05% compared to a 26.36% fall for the Russell 2000 Growth Index and an 18.11% decline for the S&P 500 Index. Inflation and aggressive fed tightening impacted the fund’s performance in 2022. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Small Cap Fund highlighted stocks like European Wax Center, Inc. (NASDAQ:EWCZ) in its Q4 2022 investor letter. Headquartered in Plano, Texas, European Wax Center, Inc. (NASDAQ:EWCZ) is a franchisor and operator of out-of-home waxing services. On February 16, 2023, European Wax Center, Inc. (NASDAQ:EWCZ) stock closed at $19.19 per share. One-month return of European Wax Center, Inc. (NASDAQ:EWCZ) was 12.62% and its shares lost 22.21% of their value over the last 52 weeks. European Wax Center, Inc. (NASDAQ:EWCZ) has a market capitalization of $1.375 billion.
Baron Small Cap Fund made the following comment about European Wax Center, Inc. (NASDAQ:EWCZ) in its Q4 2022 investor letter:
“European Wax Center, Inc. (NASDAQ:EWCZ) is a fast-growing franchisor and operator of out-of-home waxing services. The stock fell after the company reported that same-store-sales growth was slightly below estimates. Management explained that they saw customers slightly increased their average time between visits, which they attribute to a slowing economy. Makes sense, but not a big deal in our eyes. We like the franchise business model, which generates mid-30s EBITDA margins and requires little capital. We think management is terrific and capable of overseeing the growth of units from 950 to over 3,000 in time, especially with the high-quality franchisees the company is attracting. The stock has been a darling since its IPO on excitement over the business model and growth prospects. As it now trades at a more reasonable multiple, we think we can make strong compounding returns from these levels.”
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European Wax Center, Inc. (NASDAQ:EWCZ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held European Wax Center, Inc. (NASDAQ:EWCZ) at the end of the third quarter, which was 21 in the previous quarter.
We discussed European Wax Center, Inc. (NASDAQ:EWCZ) in another article and shared the list of stock picks of Julian Robertson’s Tiger Management. In addition, please check out our hedge fund investor letters Q4 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.
