Baron Funds, an asset management company, released its “Baron Real Estate Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. Baron Real Estate Fund (the “Fund”) declined 20.62% (Institutional Shares) in the second quarter of 2022, underperforming its primary benchmark, the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”), which declined 17.12%. The Fund underperformed the MSCI US REIT Index (the “REIT Index”), which declined 17.16%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
In its Q2 2022 investor letter, Baron Real Estate Fund mentioned Fortune Brands Home & Security, Inc. (NYSE:FBHS) and explained its insights for the company. Founded in 1988, Fortune Brands Home & Security, Inc. (NYSE:FBHS) is an Illinois-based millwork company with a $7.7 billion market capitalization. Fortune Brands Home & Security, Inc. (NYSE:FBHS) delivered a -43.99% return since the beginning of the year, while its 12-month returns are down by -37.38%. The stock closed at $59.87 per share on September 14, 2022.
Here is what Baron Real Estate Fund has to say about Fortune Brands Home & Security, Inc. (NYSE:FBHS) in its Q2 2022 investor letter:
“Over the course of a sharp correction in its share price in the first six months of 2022, we have been acquiring shares in Fortune Brands Home & Security, Inc. (NYSE:FBHS)at what we believe are attractive valuations. Fortune Brands is a leading manufacturer of home and security products which include kitchen and bath cabinetry, plumbing and accessories, entry door systems, and security products. Management has a strong track record of delivering industry-leading growth and creating long-term value.
In the second quarter, the company announced its plans to separate into two world class companies via a tax-free spin-off of its cabinets business. Management believes the tax-free spin-off will create two independent, industry-leading public companies with scale, winning strategies, capabilities, and leadership to sustain and accelerate value creation. We believe management’s decision to separate into two public companies is prudent and will have more to say about Fortune Brands in the future. Fortune Brands Home & Security, Inc. is a leading manufacturer of home and security products, which include kitchen and bath cabinetry, plumbing and accessories, entry door systems, and security products.
The company’s shares declined 44% in the first six months of 2022 and are currently valued at a P/E multiple of only 9.2 times estimated earnings. The company recently announced its plans to spin off its cabinets business which we believe should accelerate value creation.”
Our calculations show that Fortune Brands Home & Security, Inc. (NYSE:FBHS) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Fortune Brands Home & Security, Inc. (NYSE:FBHS) was in 33 hedge fund portfolios at the end of the second quarter of 2022, compared to 34 funds in the previous quarter. Fortune Brands Home & Security, Inc. (NYSE:FBHS) delivered a -3.62% return in the past 3 months.
In June 2022, we also shared another hedge fund’s views on Fortune Brands Home & Security, Inc. (NYSE:FBHS) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
