Baron Funds, an asset management firm, published its “Baron Discovery Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. In what turned out to be a challenging first quarter, Baron Discovery Fund (the “Fund”) decreased 16.30% (Institutional Shares), which was 3.67% below the Russell 2000 Growth Index (the “Benchmark”). Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Baron Discovery Fund mentioned American Campus Communities, Inc. (NYSE:ACC) and explained its insights for the company. Founded in 1993, American Campus Communities, Inc. (NYSE:ACC) is an Austin, Texas-based real estate investment trust company with a $17.8 billion market capitalization. American Campus Communities, Inc. (NYSE:ACC) delivered a 12.45% return since the beginning of the year, while its 12-month returns are up by 32.58%. The stock closed at $64.42 per share on June 14, 2022.
Here is what Baron Discovery Fund has to say about American Campus Communities, Inc. (NYSE:ACC) in its Q1 2022 investor letter:
“We initiated a new position in American Campus Communities, Inc. (NYSE:ACC), the nation’s largest developer, owner, and manager of high-quality student housing communities. The company’s 166 properties (approximately 112,000 beds) are located either on-campus or pedestrian-to-campus (94% of the company’s net operating income comes from properties that are within 1¤2 mile of campus) in submarkets with high barriers to entry. Emerging from a difficult COVID environment when many students took classes virtually and were not on campus, the company is now poised to benefit from a much more favorable fundamental backdrop. Over the next several years, we expect strong demand driven by growing student enrolment. Combined with limited new supply deliveries since many new developments were cancelled during COVID, the net result is significant growth in occupancy, rent, and cash flow. In addition to the organic growth, we expect in the next few years, the company also has several greenfield developments that are underway and are expected to supplement growth as they open. As it relates to valuation, currently the company is trading at a discount to both private market values for comparable properties and to the publicly traded multi-family operators. We believe this valuation discrepancy will narrow as the company executes on its business plan. Following the completion of the quarterly letter, American Campus Communities agreed to be acquired by Blackstone for $65.47 per share.”
Photo by Blake Wheeler on Unsplash
Our calculations show that American Campus Communities, Inc. (NYSE:ACC) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. American Campus Communities, Inc. (NYSE:ACC) was in 20 hedge fund portfolios at the end of the first quarter of 2022, compared to 18 funds in the previous quarter. American Campus Communities, Inc. (NYSE:ACC) delivered a 18.29% return in the past 3 months.
In January 2022, we published an article that includes American Campus Communities, Inc. (NYSE:ACC) in Top 5 Real Estate Stocks to Buy According to Land & Buildings Investment Management. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
