Baron Funds, an investment management company, released its “Baron Discovery Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. Baron Discovery Fund (the Fund) reached its 10-year anniversary on September 30, 2023. Since inception, on a cumulative basis, the fund was up 195.3% (Institutional Shares) compared to the Russell 2000 Growth Index’s 91.6% return. During the quarter, the fund returned -5.36% (Institutional Shares) compared to -7.32% return for the benchmark. The bond market became the latest headwind to stock market performance in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Discovery Fund highlighted stocks like Silk Road Medical, Inc (NASDAQ:SILK) in the third quarter 2023 investor letter. Headquartered in Sunnyvale, California, Silk Road Medical, Inc (NASDAQ:SILK) is a medical device company. On November 8, 2023, Silk Road Medical, Inc (NASDAQ:SILK) stock closed at $8.03 per share. One-month return of Silk Road Medical, Inc (NASDAQ:SILK) was 11.22%, and its shares lost 83.42% of their value over the last 52 weeks. Silk Road Medical, Inc (NASDAQ:SILK) has a market capitalization of $324.868 million.
Baron Discovery Fund made the following comment about Silk Road Medical, Inc (NASDAQ:SILK) in its Q3 2023 investor letter:
“Silk Road Medical, Inc (NASDAQ:SILK) sells medical devices used in minimally invasive transcarotid artery revascularization (TCAR) procedures. The company’s TCAR device allows placement of a stent in the carotid artery to provide better blood flow to the brain, while reducing the risk of stroke during the procedure due to its innovative reverse blood flow system. The stock detracted from performance as Medicare is updating reimbursement for an alternative carotid procedure (TF-CAS) to be equivalent to TCAR and investors are debating the competitive impact. We retain conviction as TCAR is less invasive, has an easier recovery, and causes fewer periprocedural strokes than other options, including TF-CAS and carotid endarterectomy surgery (CEA),the traditional and far more invasive method of clearing and stenting carotid arteries. Following last summer’s FDA approval of Silk Road devices in the treatment of standard surgical risk carotid stenosis patients, which expanded the company’s market, Silk Road saw rising numbers of eligible patients, accelerated use of its products, reduced reimbursement uncertainty, as well as further legitimization of TCAR in the eyes of more conservative surgeons who had been holding off switching from CEA. We think TCAR is fundamentally safer, easier to perform, and more scalable than either of the alternative procedures. Currently accounting for nearly 15% of carotid stenosis interventions, we believe the TCAR should become the standard of care for treating carotid artery disease over the long term. The company now trades for an exceedingly cheap 2 times its enterprise value/sales ratio for 2024, has significant net cash on the balance sheet, and will be cash flow breakeven by our estimates in 2024. We believe that even with conservative overall market and competitive procedure share assumptions, the company will be able to double revenues over the next five years.”
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Silk Road Medical, Inc (NASDAQ:SILK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Silk Road Medical, Inc (NASDAQ:SILK) at the end of second quarter which was 24 in the previous quarter.
We discussed Silk Road Medical, Inc (NASDAQ:SILK) in another article and shared Baron Discovery Fund’s views on the company in the previous qurater. In addition, please check out our hedge fund investor letters Q3 2023 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.
