Baron Funds, an asset management company, released its “Baron Focused Growth Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. The fund declined 19.91% in the second quarter compared to a 19.55% fall for the Russell 2500 Growth Index. Inflation, the Ukraine war, and interest rate hikes impacted the quarterly performance of the fund. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Baron Funds discussed stocks like PENN Entertainment, Inc. (NASDAQ:PENN) in the second quarter investor letter. Headquartered in Wyomissing, Pennsylvania, PENN Entertainment, Inc. (NASDAQ:PENN) is a casinos and racetracks operator. On September 12, 2022, PENN Entertainment, Inc. (NASDAQ:PENN) stock closed at $33.01 per share. One-month return of PENN Entertainment, Inc. (NASDAQ:PENN) was -11.29% and its shares lost 56.03% of their value over the last 52 weeks. PENN Entertainment, Inc. (NASDAQ:PENN) has a market capitalization of $5.234 billion.
Here is what Baron Funds specifically said about PENN Entertainment, Inc. (NASDAQ:PENN) in its Q2 2022 investor letter:
“PENN Entertainment, Inc. (NASDAQ:PENN) declined 28.3% in the quarter and penalized performance by 71 bps. This was due to investor concerns that a potential recession would result in a slowdown or decline in growth. The company has seen no material change to its visitation or spending levels, and its earnings remain strong. Penn is generating strong cash flow to more than offset investments in its digital growth opportunity. It is using excess cash to buy back its stock. Penn is well positioned to weather a slowdown or recession and, if one does occur, the company should still generate revenue and EBITDA above pre-pandemic levels.
Management continues to use its excess cash for share repurchases and debt reduction as well as continuing investments in its digital businesses. We think the $50 million of losses this year from its digital business is modest in relation to Penn’s $1 billion of casino EBITDA. The losses from its digital business represent customer acquisition costs incurred as additional states legalize online gambling. Since it is far less expensive to retain existing customers than to acquire new ones, we expect marketing costs to decline as Penn builds its customer base.
Penn’s core bricks and mortar casino business remains strong, and the company has a healthy regional casino business and a strong balance sheet to fund its digital losses.”
PENN Entertainment, Inc. (NASDAQ:PENN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held PENN Entertainment, Inc. (NASDAQ:PENN) at the end of the second quarter which was 36 in the previous quarter.
We discussed PENN Entertainment, Inc. (NASDAQ:PENN) in another article and shared Baron Funds’ views on the company. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.