Baron Funds, an investment management company, released its “Baron Asset Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. US equities ended the quarter higher for the fourth quarter in a row. The Fed’s long-awaited interest rate cuts and generally positive economic data caused a significant shift from large-cap, Magnificent Seven, growth, and momentum stocks toward value, cyclical, and small-cap stocks. Against this backdrop, Baron Asset Fund returned 8.34% (Institutional Shares) in the quarter, outperforming the Russell Midcap Growth Index’s 6.54% return. The stock returns in the quarter were driven by Earnings Quality and the favorable environment for the firm’s investment strategy. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Asset Fund highlighted stocks like DexCom, Inc. (NASDAQ:DXCM), in the third quarter 2024 investor letter. DexCom, Inc. (NASDAQ:DXCM) is a medical device company that develops and commercializes continuous glucose monitoring (CGM) systems. The one-month return of DexCom, Inc. (NASDAQ:DXCM) was 7.66%, and its shares lost 23.26% of their value over the last 52 weeks. On October 29, 2024, DexCom, Inc. (NASDAQ:DXCM) stock closed at $72.24 per share with a market capitalization of $28.217 billion.
Baron Asset Fund stated the following regarding DexCom, Inc. (NASDAQ:DXCM) in its Q3 2024 investor letter:
“DexCom, Inc. (NASDAQ:DXCM) sells a continuous glucose monitoring device for patients with diabetes. Shares fell after DexCom reported lower-than-expected second quarter financial results and reduced its guidance for the year. Multiple issues surfaced during the earnings report. Management cited: 1) disruption from the expansion of its sales force; 2) channel dynamics including market share losses in the durable medical equipment channel and a revenue per user headwind from Medicare Advantage plans offering pharmacy access to its members; 3) a negative impact from faster-than-anticipated rebate eligibility; and 4) a shortfall in international sales. Some of these issues are temporary and potentially addressable. Others raise question about DexCom’s growth potential. As a result, we exited our investment.”
A doctor demonstrating how to use the medical device to a patient with diabetes.
DexCom, Inc. (NASDAQ:DXCM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held DexCom, Inc. (NASDAQ:DXCM) at the end of the second quarter which was 73 in the previous quarter. In the third quarter, DexCom, Inc. (NASDAQ:DXCM) reported revenue of $994 million, compared to $975 million in Q3 2023. While we acknowledge the potential of DexCom, Inc. (NASDAQ:DXCM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed DexCom, Inc. (NASDAQ:DXCM) and shared Jim Cramer’s latest stock picks. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.