Baron Funds, an investment management company, released its “Baron Small Cap Fund” fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. The fund was 4.24% up in the fourth quarter compared to a 4.13% return for the Russell 2000 Growth Index and a 7.56% return for the S&P 500 Index. For 2022, the fund was down 31.05% compared to a 26.36% fall for the Russell 2000 Growth Index and an 18.11% decline for the S&P 500 Index. Inflation and aggressive fed tightening impacted the fund’s performance in 2022. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Small Cap Fund highlighted stocks like Neogen Corporation (NASDAQ:NEOG) in its Q4 2022 investor letter. Headquartered in Lansing, Michigan, Neogen Corporation (NASDAQ:NEOG) develops and manufactures products for food and animal safety. On February 16, 2023, Neogen Corporation (NASDAQ:NEOG) stock closed at $20.22 per share. One-month return of Neogen Corporation (NASDAQ:NEOG) was 3.43% and its shares lost 42.95% of their value over the last 52 weeks. Neogen Corporation (NASDAQ:NEOG) has a market capitalization of $4.371 billion.
Baron Small Cap Fund made the following comment about Neogen Corporation (NASDAQ:NEOG) in its Q4 2022 investor letter:
“We re-initiated a position in Neogen Corporation (NASDAQ:NEOG), a leading pure-play food security company with solutions across food safety, animal safety, and genomics. The company offers a wide array of products including indicator testing (Petrifilm), diagnostic test kits to detect dangerous or unintended substances in food, genetic testing, rodenticides, disinfectants, vaccines, veterinary instruments, laboratory services, and data analytics.
We have long admired Neogen, having been shareholders in the past, as recently as 2020. Our interest in the stock reignited with its recently completed merger with 3M Food Safety and valuation reset in 2022. The 3M Food Safety deal is transformational and creates a scaled global leader in the food security industry with a broader product portfolio and increased resources to invest in innovation and manufacturing efficiency. 3M Food Safety is a high-margin, consumables business that has grown sales at a 9% CAGR historically. With less than 35% customer overlap, Neogen expects to accelerate growth via cross-selling, especially in Petrifilm, 3M Food Safety’s leading indicator testing brand. On valuation, the stock pulled back meaningfully in 2022 due to a combination of broader macro-related weakness for small-cap growth companies and technical pressure in the stock related to the merger…” (Click here to read the full text)
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Neogen Corporation (NASDAQ:NEOG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Neogen Corporation (NASDAQ:NEOG) at the end of the third quarter, which was 21 in the previous quarter.
We discussed Neogen Corporation (NASDAQ:NEOG) in another article and shared the list of best high-risk high-reward stocks to buy. In addition, please check out our hedge fund investor letters Q4 2022 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.
