Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund declined 7.1% (Institutional Shares) compared to a 2.2% gain for the Russell 1000 Growth Index and a 7.6% gain for the S&P 500 Index. For the year 2022, the fund declined 50.5% compared to 29.1% and 18.1% respectively for the benchmarks. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Fifth Avenue Growth Fund highlighted stocks like Meta Platforms, Inc. (NASDAQ:META) in the Q4 2022 investor letter. Headquartered in Menlo Park, California, Meta Platforms, Inc. (NASDAQ:META) is a technology company that develops products to connect people. On March 3, 2023, Meta Platforms, Inc. (NASDAQ:META) stock closed at $185.25 per share. One-month return of Meta Platforms, Inc. (NASDAQ:META) was -0.44%, and its shares lost 1.18% of their value over the last 52 weeks. Meta Platforms, Inc. (NASDAQ:META) has a market capitalization of $480.287 billion.
Baron Fifth Avenue Growth Fund made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2022 investor letter:
“We also added to Meta Platforms, Inc. (NASDAQ:META) in the fourth quarter. Foreign currency movements and the weakening macro environment have impacted Meta’s revenue growth rates in the near term (revenues declined 4% year[1]over-year in the most recently reported third quarter), while investors continue to be focused on the company’s growing expenses and capital expenditures, which create a double-whammy impact on margins and free[1]cash-flow. This hyper-focus on the near term (driving the stock down 25% the day after earnings) overlooks the company’s long-term prospects, in our view. First, Meta has 2.9 billion daily active users and is growing (it was up 4% year-over-year). Second, Meta is already seeing significant user engagement for its Reels product that competes with TikTok. Reels reached 140 billion daily views across Facebook and Instagram, a 50% increase over the last 6 months, and, as importantly, Reels engagement has been incremental to time spent on the platform. Third, Reels is rapidly scaling its monetization, hitting a $3 billion revenue run-rate during the third quarter, up from $1 billion in the second quarter, and, based on rumored numbers for TikTok in 2022, likely already has a 15% to 25% market share since its standing start in 2021. Fourth, while the company continues growing its expenses, we are encouraged by the recent cost cutting announcements and believe that continued investment in AI-infrastructure will pay off, as the company works to regain the lost signal from Apple’s IDFA and ATT changes. Lastly, the sell-off in the shares resulted in a deeply undervalued stock for those investors willing to look out a few years, with its next-12-months earnings yield climbing above 9% during the quarter. This yield also compares to about 6% for the S&P 500 Index.”
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Meta Platforms, Inc. (NASDAQ:META) is in 4th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 194 hedge fund portfolios held Meta Platforms, Inc. (NASDAQ:META) at the end of the fourth quarter which was 177 in the previous quarter.
We discussed Meta Platforms, Inc. (NASDAQ:META) in another article and shared Artisan Value Fund’s views on the company. In addition, please check out our hedge fund investor letters Q4 2022 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.
