Baron Funds, an investment management company, released its “Baron Discovery Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, the fund appreciated 6.20% (Institutional Shares), outperforming the 4.50% return for the Russell 2000 Growth Index. For the year ended December 31, 2024, the fund returned 16.28% compared to the index’s 15.15% return. Given the challenging start in the first half of the year, the fund was pleased with the outperformance of the fund in 2024. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Discovery Fund highlighted stocks like ServiceTitan, Inc. (NASDAQ:TTAN), in the fourth quarter 2024 investor letter. ServiceTitan, Inc. (NASDAQ:TTAN) provides service activities required to install, maintain, and service the infrastructure and systems. The one-month return of ServiceTitan, Inc. (NASDAQ:TTAN) was -7.74%, and YTD its shares lost 2.79% of their value. On January 23, 2024, ServiceTitan, Inc. (NASDAQ:TTAN) stock closed at $100.00 per share with a market capitalization of $8.994 billion.
Baron Discovery Fund stated the following regarding ServiceTitan, Inc. (NASDAQ:TTAN) in its Q4 2024 investor letter:
“ServiceTitan, Inc. (NASDAQ:TTAN) is the leading business management software platform for “the trades” (i.e HVAC, plumbing, electrical, pest control, roofing, etc.). The platform serves as a system of record offering clients nearly everything they need to run their businesses including customer relationship management (sales enablement, marketing automation, and customer service), field service management (scheduling/dispatching), enterprise resource planning (inventory), human capital management (compensation and payroll) and fintech (payments and consumer financing).
ServiceTitan operates in a large market. In just the U.S. and Canada, the trades are roughly a $1.5 trillion annual industry and ServiceTitan’s current set of solutions serve about $650 billion of this spend. This equates to about a $30 billion addressable market for the company, of which $13 billion is serviceable today. The industry is also resilient given that over 75% of U.S. residential trades jobs are non-discretionary in nature. Relative to its competition, ServiceTitan has several notable advantages including: 1) it is by far the leading end-to-end software platform built specifically for the trades that provides a strong return on investment to clients and would be very hard to catch at this point given it is virtually a one-stop-shop for all of a trade’s business’ technology needs; 2) it has a first mover advantage that allowed the company to build up broad-based customer trust over time; and 3) the company’s scale provides a big data advantage as ServiceTitan can use its industry leading data to make continuous improvements to its product offerings and connect previously disparate processes for customers…” (Click here to read the full text)
An engineer inspecting a HVAC system, revealing the complexity of the products.
ServiceTitan, Inc. (NASDAQ:TTAN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. ServiceTitan, Inc.’s (NASDAQ:TTAN) third quarter revenue increased 24% year-over-year to $199.3 million. While we acknowledge the potential of ServiceTitan, Inc. (NASDAQ:TTAN) 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 ServiceTitan, Inc. (NASDAQ:TTAN) and shared the list of stocks that Jim Cramer recently discussed. 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.