Baron Funds, an investment management firm, released its “Focused Growth Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund decreased 0.21% (Institutional Shares) in the second quarter outperforming the Russell 2500 Growth Index’s (the Benchmark) 4.22% decline. It became clear throughout the quarter that the Federal Reserve’s (the Fed) restrictive actions over the previous year were starting to reduce employment, job growth, and inflation. The deceleration of economic growth gave investors hope that the Federal Reserve would begin reducing interest rates as early as this fall. Please spare some time to check the fund’s top 5 holdings to know more about their top bets for 2024.
Baron Focused Growth Fund highlighted stocks like Krispy Kreme, Inc. (NASDAQ:DNUT) in the second quarter 2024 investor letter. Krispy Kreme, Inc. (NASDAQ:DNUT) is a Doughnut producing company. The one-month return of Krispy Kreme, Inc. (NASDAQ:DNUT) was 16.91%, and its shares lost 15.06% of their value over the last 52 weeks. On September 3, 2024, Krispy Kreme, Inc. (NASDAQ:DNUT) stock closed at $11.34 per share with a market capitalization of $1.923 billion.
Baron Focused Growth Fund stated the following regarding Krispy Kreme, Inc. (NASDAQ:DNUT) in its Q2 2024 investor letter:
“Doughnut chain Krispy Kreme, Inc. (NASDAQ:DNUT) detracted during the quarter alongside the broader peer group, with small cap names being hit harder than their larger counterparts. Other company-specific concerns may also have pressured share prices, including the Federal Reserve’s delay in the timing of rate cuts given Krispy Kreme’s high leverage, weaker-than-anticipated credit card data, concerns around the strength of consumer sentiment, uncertainty around the company’s ability to execute on its partnership with McDonald’s, and holding company JAB’s announced plans to diversifying outside of consumer. We remain investors. The expected sale of Insomnia cookies should alleviate leverage issues, the credit card data is not an accurate metric as it does not include its growing wholesale sales, and we do not believe JAB intends to sell down its position in the near future. We see a strong growth opportunity and potential for outsized shareholder returns as Krispy Kreme expands its network and prepares for the expanded McDonald’s partnership.”
An employee of the grocery store happily decorating doughnuts with colorful icing.
Krispy Kreme, Inc. (NASDAQ:DNUT) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held Krispy Kreme, Inc. (NASDAQ:DNUT) at the end of the second quarter which was 13 in the previous quarter. While we acknowledge the potential of Krispy Kreme, Inc. (NASDAQ:DNUT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Krispy Kreme, Inc. (NASDAQ:DNUT) and shared the list of best dividend stocks under $15. In addition, please check out our hedge fund investor letters Q2 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.
