Baron Funds, an investment management company, released its “Baron Real Estate Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q1 2025, stocks were sold due to economic growth slowdown, inflation, and policymaking issues, including Baron Real Estate Fund®, without considering value. The fund declined 6.69% (Institutional Shares) in the quarter compared to a 3.11% decline for the MSCI USA IMI Extended Real Estate Index (the MSCI Real Estate Index) and a 0.76% gain for the MSCI US REIT Index (the REIT Index). In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Baron Real Estate Fund highlighted stocks such as American Tower Corporation (NYSE:AMT). American Tower Corporation (NYSE:AMT) is a leading independent multitenant communications real estate operator. The one-month return of American Tower Corporation (NYSE:AMT) was -8.16%, and its shares gained 4.90% of their value over the last 52 weeks. On April 10, 2025, American Tower Corporation (NYSE:AMT) stock closed at $204.50 per share with a market capitalization of $95.73 billion.
Baron Real Estate Fund stated the following regarding American Tower Corporation (NYSE:AMT) in its Q1 2025 investor letter:
“American Tower Corporation (NYSE:AMT) is the leading global mobile tower operator with 150,000 sites globally, with demand underpinned by the increasing secular growth in mobile data.
American Tower currently trades at 20 times cash flow for high single-digit underlying growth, which is a 3 multiple point discount versus history and 1.5 multiple point discount to REITs broadly (which are growing mid-single digit and trading at 21.5 times cash flow) for more durable and secular growth.
Shares of American Tower Corporation performed well in the quarter due to accelerating carrier bookings activity and management’s solid outlook for underlying 2025 financials. Once the broader market processed the 2025 outlook, which admittedly had several moving pieces, investors concluded that the prospects for the “clean” American Tower post its exit of India and capital allocation prioritization into developed markets would position the company to drive highly predictable and recurring earnings growth with less volatility going forward. We agree – please see our “Top net purchases” section for further thoughts on American Tower…” (Click here to read the full text)
A wide angled view of a high-rise office building, the windows reflecting a nearby cityscape.
American Tower Corporation (NYSE:AMT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 70 hedge fund portfolios held American Tower Corporation (NYSE:AMT) at the end of the fourth quarter compared to 73 in the third quarter. While we acknowledge the potential of American Tower Corporation (NYSE:AMT) 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 undervalued AI stock set for massive gains.
In another article, we covered American Tower Corporation (NYSE:AMT) and shared the list of best-performing real estate stocks. In addition, please check out our hedge fund investor letters Q1 2025 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.
