Baron Funds, an investment management company, released its “Baron Growth Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. Interest rate hikes put pressure on the stocks in the quarter. In the third quarter, the fund declined 3.66% (Institutional Shares) compared to the primary benchmark the Russell 2000 Growth Index’s 7.32% decline and the S&P 500 Index’s 3.27% loss. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Growth Fund highlighted stocks like Krispy Kreme, Inc. (NASDAQ:DNUT) in the third quarter 2023 investor letter. Headquartered in Charlotte, North Carolina, Krispy Kreme, Inc. (NASDAQ:DNUT) produces and distributes doughnuts. On December 1, 2023, Krispy Kreme, Inc. (NASDAQ:DNUT) stock closed at $13.23 per share. One-month return of Krispy Kreme, Inc. (NASDAQ:DNUT) was -1.34%, and its shares lost 12.85% of their value over the last 52 weeks. Krispy Kreme, Inc. (NASDAQ:DNUT) has a market capitalization of $2.23 billion.
Baron Growth Fund made the following comment about Krispy Kreme, Inc. (NASDAQ:DNUT) in its Q3 2023 investor letter:
“We increased our holding in Krispy Kreme, Inc. (NASDAQ:DNUT), an omni-channel manufacturer and retailer of doughnuts. Krispy Kreme sells its product through its owned and franchised doughnut shops, and in grocery and convenience stores through its Delivered Fresh Daily (DFD) network. Krispy also sells via e-commerce. Krispy Kreme is successfully executing its plan to grow DFD points of access by 10% to 15% annually. It now services nearly 13,000 points of access in 37 countries by leveraging over 400 doughnut producing hubs worldwide.
We believe that Krispy Kreme is making consistent progress along its core growth vectors. In its most recently reported quarter, the company grew revenue 11.4% organically as it benefited from pricing, growth in premium specialty doughnuts, and the growth of DFD. Within the U.S., sales per hub grew 9%, while average sales per DFD location increased by 16%, indicating the long growth runway that exists within its existing footprint.
We remain excited by the trial with McDonald’s in the Louisville, Kentucky area, which presently includes 160 locations. To date, sales at McDonald’s have proven to be incremental to existing donut shop and DFD sales in the region, and Krispy Kreme has been able to successfully serve these additional points of access from its existing hub network. We believe that a successful trial in Kentucky could ultimately lead to a broader rollout across McDonald’s restaurants and may also motivate additional quick service restaurant chains to contemplate a similar partnership with Krispy Kreme.”
Photo by Ben Dutton on Unsplash
Krispy Kreme, Inc. (NASDAQ:DNUT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 7 hedge fund portfolios held Krispy Kreme, Inc. (NASDAQ:DNUT) at the end of third quarter which was 12 in the previous quarter.
We discussed Krispy Kreme, Inc. (NASDAQ:DNUT) in another article and shared Baron Growth Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2023 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.
