Baron Funds, an investment management company, released its “Baron Real Estate Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund rose 6.17% (Institutional Shares) compared to a 4.90% return for the MSCI US REIT Index (the “REIT Index”) and an 8.71% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). For 2022, the fund declined 28.44% compared to a 23.84% decline for the MSCI Real Estate Index and a 25.37% decline for the REIT Index. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Funds highlighted stocks like Invitation Homes Inc. (NYSE:INVH) in the Q4 2022 investor letter. Invitation Homes Inc. (NYSE:INVH) is a home leasing company. On January 30, 2023, Invitation Homes Inc. (NYSE:INVH) stock closed at $31.80 per share. One-month return of Invitation Homes Inc. (NYSE:INVH) was 8.68%, and its shares lost 23.96% of their value over the last 52 weeks. Invitation Homes Inc. (NYSE:INVH) has a market capitalization of $19.524 billion.
Baron Funds made the following comment about Invitation Homes Inc. (NYSE:INVH) in its Q4 2022 investor letter:
“We recently reduced the Fund’s holding in Invitation Homes Inc. (NYSE:INVH) following disappointing quarterly earnings results and our expectations that growth may disappoint in 2023. Invitation Homes is the largest single-family home leasing company in the U.S. with approximately 80,000 homes concentrated in California, Florida, Georgia, Arizona, Washington, and the Carolinas. Its primary business strategy focuses on acquiring, renovating, leasing, and operating single-family homes as rentals.
We remain bullish about the long-term prospects for the company given multiple growth opportunities which include significant pent-up demand from the millennial generation to rent single-family homes against a backdrop of constrained inventory, acquisitions of homes in high-growth geographic markets, and the expansion of ancillary home services for residents (e.g., enhanced smart home, pest control, landscaping, and pet services).
Invitation Homes, Inc. was a detractor during the quarter after the company announced disappointing earnings results. Invitation Homes reduced full-year guidance due to higher-than-expected expenses driven by outsized tax assessments in several key states that represented over 40% of cash flow. The company’s shares continued to underperform as it become increasingly evident that many expenses would persist into 2023 while the growth outlook remained uncertain given the macroeconomic outlook. While we remain optimistic on the long-term value proposition and growth prospects, we reduced our position due to the evolving near-term concerns and headwinds.”
Pixabay/ Public Domain
Invitation Homes Inc. (NYSE:INVH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Invitation Homes Inc. (NYSE:INVH) at the end of the third quarter, which was 27 in the previous quarter.
We discussed Invitation Homes Inc. (NYSE:INVH) in another article and shared Baron Funds’ views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
Suggested Articles:
- 12 Cheap Blue Chip Stocks To Buy
- World’s Most Valuable Private Companies
- 15 Most Undervalued Quality Stocks To Buy
Disclosure: None. This article is originally published at Insider Monkey.
