Recession Concerns Hurt the Performance of Hyatt Hotels Corporation (H)

Baron Funds, an asset management company, released its “Baron Focused Growth Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. The fund declined 19.91% in the second quarter compared to a 19.55% fall for the Russell 2500 Growth Index. Inflation, the Ukraine war, and interest rate hikes impacted the quarterly performance of the fund. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Baron Funds discussed stocks like Hyatt Hotels Corporation (NYSE:H) in the second quarter investor letter. Headquartered in Chicago, Illinois, Hyatt Hotels Corporation (NYSE:H) is into hospitality business that operates internationally. On September 12, 2022, Hyatt Hotels Corporation (NYSE:H) stock closed at $94.10 per share. One-month return of Hyatt Hotels Corporation (NYSE:H) was -1.08% and its shares gained 25.35% of their value over the last 52 weeks. Hyatt Hotels Corporation (NYSE:H) has a market capitalization of $10.269 billion.

Here is what Baron Funds specifically said about Hyatt Hotels Corporation (NYSE:H) in its Q2 2022 investor letter:

“Hyatt Hotels Corporation (NYSE:H) declined 22.6% and hurt performance by 149 bps in the quarter on investor concerns that a possible recession will result in growth rates that would slow or even turn negative, and the company is currently generating peak profits. Thus far, the company has seen no material slowdown in occupancy levels or rates and continues to increase prices, especially on the leisure side. While leisure may be experiencing peak demand levels, management believes any slowdown in growth should be offset by the continued recovery of group and business customers.

Volumes in these segments are rapidly returning to pre-pandemic levels. This should lead to higher margins as group and business travel spending is higher than leisure spending. The company’s anticipated strong free cash flow, coupled with cash proceeds from owned asset sales, can be used to repay debt incurred to complete its acquisition of Apple Leisure Group. Hyatt’s balance sheet is strong, and it has recently re-initiated its stock buyback program. Hyatt’s robust balance sheet and cash flow profile combined with additional asset sales should also result in more consistent earnings that could result in multiple expansion.”

Hyatt Hotels Corporation (NYSE:H) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Hyatt Hotels Corporation (NYSE:H) at the end of the second quarter which was 42 in the previous quarter.

We discussed Hyatt Hotels Corporation (NYSE:H)  in another article and shared Baron Funds’ views on the company. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.

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