Baron Funds, an asset management firm, published its “Baron Asset Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron Asset Fund (the “Fund”) fell 14.52% (Institutional Shares), while the Russell Midcap Growth Index (the “Index”) fell 12.58%. The S&P 500 Index, which comprises both growths and value-oriented large-cap stocks, fell 4.60%. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Baron Asset Fund mentioned CoStar Group, Inc. (NASDAQ:CSGP) and explained its insights for the company. Founded in 1987, CoStar Group, Inc. (NASDAQ:CSGP) is a Washington, D.C.-based commercial property company with a $22.5 billion market capitalization. CoStar Group, Inc. (NASDAQ:CSGP) delivered a -27.90% return since the beginning of the year, while its 12-month returns are down by -30.34%. The stock closed at $56.98 per share on May 16, 2022.
Here is what Baron Asset Fund has to say about CoStar Group, Inc. (NASDAQ:CSGP) in its Q1 2022 investor letter:
“CoStar Group, Inc. is the leading provider of information and marketing services to the commercial real estate and apartment rental markets. During the first quarter, despite reporting strong financial results, the company’s shares were down more than 50% from their high point during the previous quarter. The stock’s weakness was attributed to the company’s decision to invest aggressively in its emerging residential housing business. CoStar intends to use two of its recently acquired businesses, Homes.com and Homesnap, to build a compelling offering for potential home buyers and listing brokers. Management believes that this residential business could reach $1 billion in revenues within five years and that the ultimate revenue opportunity is considerably larger. We believe that this business could eventually achieve profitability on par with its other business (over 40% EBITDA margins). When the company made a similarly large investment during its expansion into the apartments market, the market initially punished its stock. The company proved skeptics wrong, as its apartments unit achieved considerable success. We believe that today’s investment into residential real estate will prove skeptics wrong again. In the event the residential business does not achieve its goals, management will likely stop investing and divert those resources to other promising opportunities, such as international expansion.”
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Our calculations show that CoStar Group, Inc. (NASDAQ:CSGP) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. CoStar Group, Inc. (NASDAQ:CSGP) was in 49 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 29 funds in the previous quarter. CoStar Group, Inc. (NASDAQ:CSGP) delivered a -13.65% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on CoStar Group, Inc. (NASDAQ:CSGP) in another article. 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.
