Baron Funds, an asset management firm, published its “Baron Small Cap Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of 4.69% was delivered by the fund’s institutional shares for the fourth quarter of 2021 and 15.84% for the year. This well exceeded the returns of the Russell 2000 Growth Index (the “Index”), which was flat in the fourth quarter and up 2.83% for the year. This was a quarter and a year where small-cap stocks did worse than large caps. The S&P 500 Index gained 11.03% in the quarter and 28.71% for the year. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022
Baron Small Cap Fund, in its Q4 2021 investor letter, mentioned Penn National Gaming, Inc. (NASDAQ: PENN) and discussed its stance on the firm. Penn National Gaming, Inc. is a Wyomissing, Pennsylvania-based casino company with a $8.2 billion market capitalization. PENN delivered a -6.06% return since the beginning of the year, while its 12-month returns are down by -59.01%. The stock closed at $48.71 per share on February 08, 2022
Here is what Baron Small Cap Fund has to say about Penn National Gaming, Inc. in its Q4 2021 investor letter:
“Shares of Penn National Gaming, Inc. fell in the quarter, as stocks of online gaming companies were under pressure. Sports betting and i-gaming are rolling out with great fanfare and success across the country; however, investors seem concerned about competition and margins. Most participants are spending heavily on marketing and promotions, which is cutting into margins. We see this as worthy investment in customer acquisition at a moment in time when revenues are just building. We continue to believe that online sports betting and gaming will be enormous industries, that that Penn will carve out a modest share. We think the business will have high margins as it matures. We believe we are underwriting both businesses conservatively and see much upside in the long term. Penn has a strong, well-performing brick and mortar casino business that we believe is worth close to its present stock price, so though we are taking a wait-and-see approach to its sports betting offering, there should be little downside from here.”
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Our calculations show that Penn National Gaming, Inc. (NASDAQ: PENN) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. PENN was in 38 hedge fund portfolios at the end of the third quarter of 2021, compared to 40 funds in the previous quarter. Penn National Gaming, Inc. (NASDAQ: PENN) delivered a -16.38% return in the past 3 months.
In December 2021, we also shared another hedge fund’s views on PENN 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.
