Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the U.S. large cap was once again the place to be. The fund increased 5.7% (Institutional Shares) in the second quarter compared to an 8.3% gain for the Russell 1000 Growth Index and a 4.3% increase for the S&P 500 Index. Year to date, the fund returned 19.1% compared to 20.7% and 15.3% gains for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Fifth Avenue Growth Fund highlighted stocks like Shopify Inc. (NYSE:SHOP) in its Q2 2024 investor letter. Headquartered in Ottawa, Canada, Shopify Inc. (NYSE:SHOP) provides a cloud-based commerce platform and services. The one-month return of Shopify Inc. (NYSE:SHOP) was 41.73%, and its shares gained 11.03% of their value over the last 52 weeks. On August 30, 2024, Shopify Inc. (NYSE:SHOP) stock closed at $74.07 per share with a market capitalization of $95.454 billion.
Baron Fifth Avenue Growth Fund stated the following regarding Shopify Inc. (NYSE:SHOP) in its Q2 2024 investor letter:
“Shopify Inc. (NYSE:SHOP) is a cloud-based software provider for multi-channel commerce. Shares declined 14.4% in the second quarter despite reporting solid quarterly results with revenue growth of 23% year-over-year, which implies continued market share gains, after the company announced it is entering an investment cycle. Since the increased investment period comes after over a year of consistent margin expansion, it left short-term-focused investors disappointed. We however believe that this is the right course of action for several reasons. First, the company expects solid returns on the increased marketing spend with 18-month payback periods. Second, the investment should help solidify Shopify’s competitive position and drive further market share gains. Finally, the increased spend should contribute to the probability of success in newer areas of opportunity with large addressable markets, including offline commerce, international, and enterprise. Shopify shared several metrics showing early success, with gross merchandise value up 130%, 38%, and 32% year-over-year in B2B, EMEA, and offline, respectively. We remain shareholders due to Shopify’s strong competitive positioning, innovative culture, and long runway for growth, as it still holds less than a 2% share of the global commerce market.”
A young woman shopping for a vintage fashion item online.
Shopify Inc. (NYSE:SHOP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held Shopify Inc. (NYSE:SHOP) at the end of the second quarter which was 65 in the previous quarter. Shopify Inc.’s (NYSE:SHOP) second-quarter revenue was $2 billion, up 21% year-over-year. While we acknowledge the potential of Shopify Inc. (NYSE:SHOP) 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 Shopify Inc. (NYSE:SHOP) and shared the list of stocks Jim Cramer is talking about as markets rebound. Polen Focus Growth Strategy established a position in Shopify Inc. (NYSE:SHOP) during Q2 2024. In addition, please check out our hedge fund investor letters Q2 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.
