Baron Funds on Avalara (AVLR): “We Maintain Conviction in the Investment”

Baron Funds, an asset management firm, published its “Baron Asset Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. Against this backdrop, Baron Asset Fund (the “Fund”) gained 5.04% (Institutional Shares), while the Russell Midcap Growth Index (the “Index”) gained 2.85%, and the S&P 500 Index gained 11.03%. The Fund’s outperformance was attributable to favorable stock selection and tailwinds from certain style biases, notably its underexposure to the poor performing residual volatility and beta factors. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Baron Asset Fund, in its Q4 2021 investor letter, mentioned Avalara, Inc. (NYSE: AVLR) and discussed its stance on the firm. Avalara, Inc. is a Seattle, Washington-based software company with a $9.5 billion market capitalization. AVLR delivered a -15.24% return since the beginning of the year, while its 12-month returns are down by -30.36%. The stock closed at $109.43 per share on January 17, 2022.

Here is what Baron Asset Fund has to say about Avalara, Inc. in its Q4 2021 investor letter:

“Shares of Avalara, Inc., a leading cloud-based provider of transactional tax automation software, detracted from performance. The company reported solid quarterly earnings. Nevertheless, the stock sold off on a combination of a sequential deceleration in organic billings growth (explained mostly by a tough comparison) and the broader weakness in high-growth, high-multiple stocks during the quarter. We maintain conviction in the investment, as Avalara operates in a large market, has strong competitive advantages, and is poised to grow revenue at least 20% for many years, in our view.”

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Our calculations show that Avalara, Inc. (NYSE: AVLR) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. AVLR was in 24 hedge fund portfolios at the end of the third quarter of 2021, compared to 29 funds in the previous quarter. Avalara, Inc. (NYSE: AVLR) delivered a -36.69% return in the past 3 months.

In October 2021, we also shared another hedge fund’s views on AVLR in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.