Baron Funds, an asset management firm, published its “Baron Small Cap Fund” second quarter 2022 investor letter – a copy of which can be downloaded here. Baron Small Cap Fund (the “Fund”) was down 18.60% (Institutional Shares) in the second quarter. The Fund modestly outperformed the Russell 2000 Growth Index, which was down 19.25% for the period, but lagged the S&P 500 Index, which was down 16.10%. Year-to-date, the Fund is down 31.36%, which trailed the Russell 2000 Growth Index and the S&P 500 Index, which were down 29.45% and 19.96%, respectively. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Baron Small Cap Fund mentioned Driven Brands Holdings Inc. (NASDAQ:DRVN) and explained its insights for the company. Founded in 1972, Driven Brands Holdings Inc. (NASDAQ:DRVN) is a Charlotte, North Carolina-based automotive services company with a $5.7 billion market capitalization. Driven Brands Holdings Inc. (NASDAQ:DRVN) delivered a 2.38% return since the beginning of the year, while its 12-month returns are up by 11.18%. The stock closed at $34.42 per share on September 09, 2022.
Here is what Baron Small Cap Fund has to say about Driven Brands Holdings Inc. (NASDAQ:DRVN) in its Q2 2022 investor letter:
“Driven Brands Holdings Inc. is the largest automotive service company in America, owning and overseeing multiple brands that offer repair and high frequency services such as collision, oil change, car wash, and auto glass repair. Driven operates over 4,400 locations, primarily as the franchisor and sometimes operates units of its brands. This past quarter, the company posted strong results that beat estimates. Even in a tough macro environment, same store sales rose over 15%, which highlights the resiliency of its needs-based service offerings.
EBITDA grew 52%, with organic growth supplemented by acquisitions. The company also announced that it opened over 100 new stores and that unit development, across all brands, was intact. Management also unveiled its plans to build a new leg of growth in the auto glass segment, which we feel could become an important contributor over time. We believe the company will be able to continue to grow its cash flow by double-digit rates, and that its high-quality business model and earnings stream will be re-rated higher.”
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Our calculations show that Driven Brands Holdings Inc. (NASDAQ:DRVN) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Driven Brands Holdings Inc. (NASDAQ:DRVN) was in 18 hedge fund portfolios at the end of the second quarter of 2022, compared to 15 funds in the previous quarter. Driven Brands Holdings Inc. (NASDAQ:DRVN) delivered a 20.35% return in the past 3 months.
In May 2021, we also shared another hedge fund’s views on Driven Brands Holdings Inc. (NASDAQ:DRVN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
