Is it Still Safe to Invest in CoStar Group (CSGP)?

Baron Funds, an asset management firm, published its “Baron Growth Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of 6.56% was delivered by the fund’s institutional shares for the fourth quarter of 2021 and 15.84% for the year. This exceeded the Fund’s primary benchmark, the Russell 2000 Growth Index (the “Benchmark”), which gained 0.01%. The S&P 500 Index, which measures the performance of publicly-traded large-cap U.S. companies, gained 11.03% during the period. For the full year, the Fund gained 20.15%, meaningfully exceeding its Benchmark, which gained 2.83%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Baron Growth Fund, in its Q4 2021 investor letter, mentioned CoStar Group, Inc. (NASDAQ: CSGP) and discussed its stance on the firm. CoStar Group, Inc. is a Washington, D.C.-based commercial property company with a $26.0 billion market capitalization. CSGP delivered a -16.50% return since the beginning of the year, while its 12-month returns are down by -29.78%. The stock closed at $65.99 per share on February 11, 2022.

Here is what Baron Growth Fund has to say about CoStar Group, Inc. in its Q4 2021 investor letter:

“We have seen our businesses exercise their pricing power more aggressively in recent months. CoStar Group, Inc. management indicated that the new rate card for its Apartment.com marketing network included 7% price increases on average, with prices for some products increasing by up to 20%. The company also resumed annual pricing increases in its core Suite information and analytics business after a multi-year hiatus.

Real estate data and marketing platform CoStar Group, Inc. detracted for the quarter. The company experienced a slowdown in its multi-family marketing platform as a result of record-high apartment occupancy. We believe this condition is temporary and that growth will improve through higher prices and better customer segmentation. The company is pushing into the residential market, which meaningfully expands its total addressable market. While this initiative requires short-term investment, it should ultimately yield high returns and bolster growth and margins.”

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Our calculations show that CoStar Group, Inc. (NASDAQ: CSGP) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. CSGP was in 29 hedge fund portfolios at the end of the third quarter of 2021, compared to 49 funds in the previous quarter. CoStar Group, Inc. (NASDAQ: CSGP) delivered a -20.36% return in the past 3 months.

In February 2022, we also shared another hedge fund’s views on CSGP in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.