Baron Funds, an investment management company, released its “Baron Asset Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. US equities ended the quarter higher primarily due to the market’s strength following Donald Trump’s election as president and the Republican majority in both houses of Congress. While Baron Asset Fund had a difficult fourth quarter, returning -(0.04)% (Institutional Shares) compared to the Russell Midcap Growth Index’s 8.14% return. The firm believes that the relative shortfall was caused by a number of circumstances that would only last temporarily. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Baron Asset Fund emphasized stocks such as Dayforce Inc (NYSE:DAY). Ceridian HCM Holding Inc. changed its name to Dayforce Inc. in February 2024. Incorporated in 1992, Dayforce Inc (NYSE:DAY) is a human capital management (HCM) software company. The one-month return of Dayforce Inc (NYSE:DAY) was 4.99%, and its shares lost 9.51% of their value over the last 52 weeks. On February 13, 2025, Dayforce Inc (NYSE:DAY) stock closed at $66.68 per share with a market capitalization of $10.602 billion.
Baron Asset Fund stated the following regarding Dayforce Inc (NYSE:DAY) in its Q4 2024 investor letter:
“Shares of Dayforce Inc (NYSE:DAY), a leader in global payroll and human capital management (HCM) software, contributed positively to performance for the quarter. Dayforce is benefiting from powerful secular trends around the modernization of HCM software and growing adoption of the software-as-a-service business model. We believe that Dayforce can sustain recurring revenue growth around 20%, helped by market share gains, a move “up-market” to larger size customers, compelling new products, and growing success in cross-selling additional functionality to its existing customers. After a multi-year investment cycle, the company is now experiencing significant margin expansion and rapid growth in free cash flow, which management has begun to return to investors.”
A worker smiling as they receive their pay check.
Dayforce Inc (NYSE:DAY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held Dayforce Inc (NYSE:DAY) at the end of the third quarter which was 23 in the previous quarter. Dayforce Inc (NYSE:DAY) reported $1.76 billion in total revenue in 2024, growing 17% on a constant currency basis. While we acknowledge the potential of Dayforce Inc (NYSE:DAY) 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 Dayforce Inc (NYSE:DAY) and shared the list of best human resources stocks to invest in. 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.