Baron Funds, an investment management company, released its “Baron Small Cap Fund” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. A general sense of optimism was prevalent in the market, driven by the conviction that the economy remained robust, inflation was moderating, and rate cuts were anticipated shortly. Baron Small Cap Fund had an outstanding first quarter and performed well ahead of the Russell 2000 Growth Index (the Benchmark). The fund returned 11.81% (Institutional Shares) in the quarter while the benchmark returned 7.58%. One-third of the benchmark’s performance was driven by the anomalous performance of one stock, Super Micro Computer, Inc, which tripled in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Small Cap Fund highlighted stocks like Vertiv Holdings Co (NYSE:VRT), in the first quarter 2024 investor letter. Vertiv Holdings Co (NYSE:VRT) designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments. The one-month return of Vertiv Holdings Co (NYSE:VRT) was 11.99%, and its shares gained 437.84% of their value over the last 52 weeks. On May 24, 2024, Vertiv Holdings Co (NYSE:VRT) stock closed at $106.17 per share with a market capitalization of $39.744 billion.
Baron Small Cap Fund stated the following regarding Vertiv Holdings Co (NYSE:VRT) in its first quarter 2024 investor letter:
“Shares of Vertiv Holdings Co (NYSE:VRT), a manufacturer of critical infrastructure equipment for data centers, rose during the quarter due to improved focus on operational execution, strong revenue growth prospects, and robust opportunities for margin expansion. We expect Vertiv to benefit from the rising demand for data center capacity, with approximately 70% of its revenue coming from the data center end market. As one of the leading providers of precision cooling for data centers, Vertiv also stands to benefit from the increasing adoption of generative AI (GenAI), as GenAI-related servers have higher energy density, which will necessitate more complicated cooling solutions. We reduced the position into strength, but we remain large shareholders. We believe that Vertiv’s leading market position in data center thermal and power management will lead to strong growth and substantial upside over the long term.”
A close-up of a group of technicians working on complex data center systems.
Vertiv Holdings Co (NYSE:VRT) had a strong start in 2024 with an 8% increase in first quarter sales. Vertiv Holdings Co (NYSE:VRT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 85 hedge fund portfolios held Vertiv Holdings Co (NYSE:VRT) at the end of the first quarter which was 75 in the previous quarter.
In another article, we discussed Vertiv Holdings Co (NYSE:VRT) and shared the list of unstoppable growth stocks to buy. Vertiv Holdings Co (NYSE:VRT) was a top contributor to Baron Small Cap Fund last quarter, with the stock rising 29%. In addition, please check out our hedge fund investor letters Q1 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.
