Baron Funds, an investment management company, released its “Baron FinTech Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund rose 12.52% (Institutional Shares) compared to a 12.21% return for the FactSet Global FinTech Index (Benchmark) and a 5.89% gain for the S&P 500 index. Since inception, the fund has appreciated 11.63% at an annualized rate, compared to 3.23% for the Benchmark. U.S. stocks increased for the fourth quarter as the Federal Reserve’s long-awaited dovish turn was made possible by easing inflation and generally positive economic data supporting the soft landing story. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron FinTech Fund highlighted stocks like Primerica, Inc. (NYSE:PRI) in the third quarter 2024 investor letter. Primerica, Inc. (NYSE:PRI) offers financial products and services to middle-income households. The one-month return of Primerica, Inc. (NYSE:PRI) was 7.88%, and its shares gained 45.00% of their value over the last 52 weeks. On November 11, 2024, Primerica, Inc. (NYSE:PRI) stock closed at $300.62 per share with a market capitalization of $10.032 billion.
Baron FinTech Fund stated the following regarding Primerica, Inc. (NYSE:PRI) in its Q3 2024 investor letter:
“We also initiated a position inPrimerica, Inc. (NYSE:PRI), a provider of life insurance and investment products to middle income customers in the U.S. and Canada. We believe Primerica is a steady earnings grower with significant competitive advantages trading at a cheap valuation due to its underappreciated business model.
As the responsibility for retirement savings increasingly shifts to individuals, Primerica serves a growing need for financial planning in the underserved middle income customer segment. While most life insurers and financial planners target the wealthiest households, Primerica instead serves the less competitive middle-income segment, defined as the 54% of U.S. households with $30,000 to $130,000 of annual income. Primerica’s 145,000 sales reps sell term life insurance underwritten by the company as well as mutual funds, annuities, and managed accounts on behalf of third-party asset managers. The company reinsures between 80% and 90% of the mortality risk for all term life insurance policies, thereby reducing the capital intensity and making the business model more akin to an asset-light broker than a traditional life insurer. The company’s 26.5% ROE last year was more than double the 12.5% average ROE for other publicly traded life insurers…” (Click here to read the full text)
A successful independent agent or broker discussing the benefits of life and health insurance with a customer.
Primerica, Inc. (NYSE:PRI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held Primerica, Inc. (NYSE:PRI) at the end of the second quarter which was 24 in the previous quarter. While we acknowledge the potential of Primerica, Inc. (NYSE:PRI) 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 Primerica, Inc. (NYSE:PRI) and shared the list of most profitable mid-cap stocks to invest in. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.