Baron Discovery Fund recently published its second-quarter commentary – a copy of which can be downloaded here. During the second quarter of 2021, the Baron Discovery Fund returned 6.07% (institutional shares). In comparison, the benchmark S&P 500 Index was up 8.55%, while the Russell 2000 Growth Index was up 3.92%. You should check out Baron Discovery Fund’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q2 2021 Investor Letter, the fund highlighted a few stocks and Array Technologies Inc. (NASDAQ:ARRY) is one of them. Array Technologies Inc. (NASDAQ:ARRY) is the global leader in manufacturing solar tracking solutions. In the last three months, Array Technologies Inc. (NASDAQ:ARRY) stock gained 20%. Here is what the fund said:
“Array Technologies, Inc., a leading manufacturer of solar trackers, fell during the quarter after management rescinded guidance due to uncertainty around rapidly rising steel costs. Our understanding at the time of the company’s IPO in October 2020, was that Array fixed input costs at the same time as its sales contracts were signed, thereby eliminating commodity pricing risk. However, this quarter management noted that a lag of just a few days between these events led to significant pricing mis-matches due to the extreme volatility in steel pricing during that period. This disrupted not only Array, but the entire contracting complex around large solar projects. Contracts relating to these projects had to be renegotiated across the board, leading to multiple quarter delays in revenue recognition. Further, our due diligence has indicated that while the company has terrific products, it might be falling behind its competitors from an innovation standpoint, increasing our concerns that the company will not reach its market penetration goals. For these reasons we sold the investment in the quarter.”
Baron Fund has been a long time Array Technologies Inc. (NASDAQ:ARRY) bull. In May 2021, we shared Baron Fund ARRY’s thesis in this article.
In Q1 2021, the number of bullish hedge fund positions on Array Technologies Inc. (NASDAQ:ARRY) stock increased by about 3% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in ARRY’s growth potential. Our calculations showed that Array Technologies Inc. (NASDAQ:ARRY) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
