Baron Funds, an investment management company, released its “Baron Health Care Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund declined 2.55% (Institutional Shares) in the quarter compared to a 1.02% decline for the Russell 3000 Health Care Index (benchmark) and a 3.22% gain for the Russell 3000 Index (the Index). The underperformance in the quarter was due to active sub-industry/market cap weights. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Health Care Fund highlighted stocks like Viking Therapeutics, Inc. (NASDAQ:VKTX), in the second quarter 2024 investor letter. Viking Therapeutics, Inc. (NASDAQ:VKTX) is a clinical-stage biopharmaceutical company. The one-month return of Viking Therapeutics, Inc. (NASDAQ:VKTX) was 6.59%, and its shares gained 317.18% of their value over the last 52 weeks. On August 1, 2024, Viking Therapeutics, Inc. (NASDAQ:VKTX) stock closed at $54.65 per share with a market capitalization of $6.055 billion.
Baron Health Care Fund stated the following regarding Viking Therapeutics, Inc. (NASDAQ:VKTX) in its Q2 2024 investor letter:
“Another source of weakness in the sub-industry was Viking Therapeutics, Inc. (NASDAQ:VKTX), whose shares pulled back after increasing nearly 300% in the prior quarter. Viking develops metabolic disease medicines with focus on diabetes/obesity and MASH (metabolic steatohepatitis, i.e., fatty liver). The company’s lead asset is VK2735, an injectable and oral version of a GLP-1/GIP combination weight loss medication that directly competes with Lilly’s Mounjaro/Zepbound. Both of Viking’s main assets appear to be more efficacious than their competitors’ in two exceptionally large revenue end markets. Viking’s stock detracted as biotechnology specialists have leaned into an alternative mechanism for obesity called amylin inhibition and don’t view the company as an attractive acquisition target (an opinion we disagree with). The recent rebalance of the well-known SPDR S&P Biotech ETF (XBI) also pressured Viking’s share price due to forced selling by many long/short strategies to reweight their positions.”
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Viking Therapeutics, Inc. (NASDAQ:VKTX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held Viking Therapeutics, Inc. (NASDAQ:VKTX) at the end of the first quarter which was 25 in the previous quarter. In Q2 2024, Viking Therapeutics, Inc. (NASDAQ:VKTX) reported a loss of $22.3 million, or $0.20 per share, compared to a net loss of $19.2 million, or $0.19 per share in Q2 2023. While we acknowledge the potential of Viking Therapeutics, Inc. (NASDAQ:VKTX) 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 Viking Therapeutics, Inc. (NASDAQ:VKTX) and shared the list of best healthcare stocks to buy under $50. 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.
