Baron Funds, an investment management company, released its “Baron Asset Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. US equities ended the quarter higher for the fourth quarter in a row. The Fed’s long-awaited interest rate cuts and generally positive economic data caused a significant shift from large-cap, Magnificent Seven, growth, and momentum stocks toward value, cyclical, and small-cap stocks. Against this backdrop, Baron Asset Fund returned 8.34% (Institutional Shares) in the quarter, outperforming the Russell Midcap Growth Index’s 6.54% return. The stock returns in the quarter were driven by Earnings Quality and the favorable environment for the firm’s investment strategy. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Asset Fund highlighted stocks like West Pharmaceutical Services, Inc. (NYSE:WST), in the third quarter 2024 investor letter. West Pharmaceutical Services, Inc. (NYSE:WST) designs, manufactures and sells containment and delivery systems for injectable drugs and healthcare products. The one-month return of West Pharmaceutical Services, Inc. (NYSE:WST) was 5.13%, and its shares lost 2.02% of their value over the last 52 weeks. On October 29, 2024, West Pharmaceutical Services, Inc. (NYSE:WST) stock closed at $318.41 per share with a market capitalization of $23.06 billion.
Baron Asset Fund stated the following regarding West Pharmaceutical Services, Inc. (NYSE:WST) in its Q3 2024 investor letter:
“West Pharmaceutical Services, Inc. (NYSE:WST) manufactures components and systems for the packaging and delivery of injectable drugs. Shares fell on lower-than-expected financial results and reduced guidance for the year attributed to ongoing inventory destocking by its pharmaceutical customers. Post-pandemic, customers continue to use the inventory stockpiled to meet elevated pandemic-era demand. West was also able to shorten the lead time needed to meet new demand, giving customers confidence to safely reduce their inventory levels. We believe the inventory-related issues are temporary, and West remains a dominant player with competitive advantages in the growing market for injectable drugs. Management has stated that end-patient demand is in line with its expectations, market share shift is not occurring, and its win rates on packaging for new molecules remains strong. They expressed confidence that West can return to the long-term financial construct of 7% to 9% revenue growth with 100 basis points of operating margin expansion annually.”
A closeup of multiple drug containment systems in an array of colors.
West Pharmaceutical Services, Inc. (NYSE:WST) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held West Pharmaceutical Services, Inc. (NYSE:WST) at the end of the second quarter which was 46 in the previous quarter. West Pharmaceutical Services, Inc.’s (NYSE:WST) third quarter net sales were $746.9 million, representing an organic sales decline of 0.5%. While we acknowledge the potential of West Pharmaceutical Services, Inc. (NYSE:WST) 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 West Pharmaceutical Services, Inc. (NYSE:WST) and shared Conestoga Capital Advisors’ views on the company. 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.