Baron Funds on PAYA: “We were Less Impressed by its Growth and Positioning”

Baron Funds, an asset management firm, published its “Baron Small Cap Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron Small Cap Fund (the “Fund”) did poorly in the first quarter, on both an absolute and relative basis. The Fund was down 15.68% (Institutional Shares), trailing the Russell 2000 Growth Index, which lost 12.63%, and the S&P 500 Index, which fell 4.60%. The Fund’s longer-term performance is still admirable gaining 10.76% per year, on an annualized basis, over its almost 25-year history and besting the returns of its benchmark index for all relevant time periods. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Baron Small Cap Fund mentioned Paya Holdings Inc. (NASDAQ:PAYA) and explained its insights for the company. Founded in 2006, Paya Holdings Inc. (NASDAQ:PAYA) is an Atlanta, Georgia-based integrated payments and commerce platform with a $788.4 million market capitalization. Paya Holdings Inc. (NASDAQ:PAYA) delivered a -5.84% return since the beginning of the year, while its 12-month returns are down by -40.36%. The stock closed at $5.97 per share on May 20, 2022.

Here is what Baron Small Cap Fund has to say about Paya Holdings Inc. (NASDAQ:PAYA) in its Q1 2022 investor letter: 

“We own on average 21% of our original position of the 10 largest cap positions. This past quarter, the weighted average market cap of stocks we purchased, both new positions and additions to existing positions was $3.2 billion. We sold out of or trimmed stocks with a weighted average market cap of $10.5 billion. We also sold most of our position in Paya Holdings Inc. (PAYA), another fintech operator, as we were less impressed by its growth and positioning than our other holdings in the same industry.”

Our calculations show that Paya Holdings Inc. (NASDAQ:PAYA) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Paya Holdings Inc. (NASDAQ:PAYA) was in 10 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 9 funds in the previous quarter. Paya Holdings Inc. (NASDAQ:PAYA) delivered a -1.32% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Paya Holdings Inc. (NASDAQ:PAYA) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

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