Baron Funds, an asset management firm, published its “Baron Partners Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. An increase of 19.54% was delivered by the fund’s institutional shares for the fourth quarter of 2021, outperforming the Russell Midcap Growth Index which gained 2.85% for the same period. The S&P 500 Index rose 11.03% while the Morningstar Large Growth Category (the “Peer Group”) Average increased 6.91%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Baron Partners Fund, in its Q4 2021 investor letter, mentioned Tesla, Inc. (NASDAQ:TSLA) and discussed its stance on the firm. Founded in 2003, Tesla, Inc. (NASDAQ:TSLA) is a Palo Alto, California-based vehicle manufacturing company with an $860.0 billion market capitalization, and is currently spearheaded by its CEO, Elon Musk. Tesla, Inc. (NASDAQ:TSLA) delivered a -24.12% return since the beginning of the year, while its 12-month returns are up by 18.47%. The stock closed at $801.89 per share on March 15, 2022.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2021 investor letter:
“The Fund’s Disruptive Growth businesses continued to lead performance. Two sizable holdings, which include Tesla, Inc. each had gains of more than 30% in the quarter. Tesla deliveries meaningfully exceeded even the most optimistic forecasts. Despite supply-chain and labor issues that have plagued its competitors, the company delivered over 308,000 vehicles in the period. It was a quarterly record and a 71% increase compared to the prior year. Demand for Tesla cars has remained strong, and production has become increasingly streamlined. Vertical integration of many components has enabled the company to be nimble and execute while many competitors faltered. Tesla also improved its profitability during a challenging time. Excluding credits, gross margins are approaching 30% while EBITDA margins are now above 20%. Tesla’s profitability is approximately three times greater than that of legacy competitors. We believe planned improvements at existing facilities as well as new manufacturing plants scheduled to open around the world should enable the company to improve margins further. Lower-priced vehicles could be introduced, which would make it difficult for competitors to match the company’s quality and value proposition.”
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Our calculations show that Tesla, Inc. (NASDAQ:TSLA) ranks 26th on our list of the 30 Most Popular Stocks Among Hedge Funds. Tesla, Inc. (NASDAQ:TSLA) was in 91 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 60 funds in the previous quarter. Tesla, Inc. (NASDAQ:TSLA) delivered a -16.34% return in the past 3 months.
In March 2022, we also shared another hedge fund’s views on Tesla, Inc. (NASDAQ:TSLA) 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.
