Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. The second quarter saw a continuation of the trends seen earlier in the year. The fund was up 16% (Institutional Shares) in the second quarter compared to a 12.8% gain for the Russell 1000 Growth Index and an 8.7% gain for the S&P 500 Index. Year-to-date, the fund is up 38.8% compared to 29.0% and 16.9% gains, respectively, for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Fifth Avenue Growth Fund highlighted stocks like Endava plc (NYSE:DAVA) in the second quarter 2023 investor letter. Headquartered in London, the United Kingdom, Endava plc (NYSE:DAVA) is a technology services provider. On August 17, 2023, Endava plc (NYSE:DAVA) stock closed at $45.65 per share. One-month return of Endava plc (NYSE:DAVA) was -15.24%, and its shares lost 57.18% of their value over the last 52 weeks. Endava plc (NYSE:DAVA) has a market capitalization of $2.598 billion.
Baron Fifth Avenue Growth Fund made the following comment about Endava plc (NYSE:DAVA) in its second quarter 2023 investor letter:
“Endava plc (NYSE:DAVA) provides outsourced software development for business customers. Shares fell 22.9% during the second quarter due to investor concerns over the negative potential impact of GenAI on the company as well as a pullback in customer demand following the Silicon Valley Bank crisis in March, which drove increased customer cautiousness. Management reduced financial guidance for the second quarter to reflect greater macroeconomic uncertainty and lower revenues from private equity-backed companies, which represent about 20% of its business. Sales activity has since rebounded, which supports management’s view that the current slowdown is temporary and demand for digital transformations should persist. Management also believes GenAI will be a tailwind for its business. We continue to own the stock because we believe Endava will remain a share gainer in a large and growing global market for IT services as digitization only becomes more important for customers to sustain their competitive positioning and take advantage of the advancements in AI.
During the quarter, we added to our position in Endava plc after the stock continued selling off on investor concerns around the potential negative impact of GenAI on the company’s business, which coincided with lower cyclical demand due to the ongoing macro challenges. While the range of outcomes on the potential impact from AI remains wide, we believe that in most scenarios, AI would prove to be a tailwind for Endava.”
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Endava plc (NYSE:DAVA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held Endava plc (NYSE:DAVA) at the end of second quarter which was 15 in the previous quarter.
We discussed Endava plc (NYSE:DAVA) in another article and shared Argosy Investors’ views on the company. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
