Baron Funds, an investment management company, released its “Baron Discovery Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund was down 6.17% (Institutional Shares), outperforming the -11.12% return for the Russell 2000 Growth Index. The market began strong in February but faded due to Trump’s serious tariff enactment, which the market perceives as inflationary and slowing economic growth. The decline accelerated after April 2nd, causing fears of a trade war and global recession. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Baron Discovery Fund highlighted stocks such as Exact Sciences Corporation (NASDAQ:EXAS). Exact Sciences Corporation (NASDAQ:EXAS) provides cancer screening and diagnostic test products. The one-month return of Exact Sciences Corporation (NASDAQ:EXAS) was 28.97%, and its shares gained 6.39% of their value over the last 52 weeks. On May 19, 2025, Exact Sciences Corporation (NASDAQ:EXAS) stock closed at $56.94 per share with a market capitalization of $10.741 billion.
Baron Discovery Fund stated the following regarding Exact Sciences Corporation (NASDAQ:EXAS) in its Q1 2025 investor letter:
“Exact Sciences Corporation (NASDAQ:EXAS) is a cancer diagnostics company. Its flagship product is Cologuard, a stool-based screening test for colorectal cancer (CRC). Shares detracted from performance in the quarter due to fears of competitive blood-based CRC tests which may launch in 2025. While these tests cost more than Cologuard, they are somewhat more convenient for patients. However, blood-based tests do not have the same level of pre-cancer sensitivity as Cologuard, and Cologuard is significantly better at detecting pre-cancerous growths called Advanced Adenoma. Moreover, Exact Sciences is developing its own blood-based tests that we anticipate will be as accurate as competitor tests but will cost significantly less than those tests as it uses a different type of analytics to get its results. So, either way, we believe Exact Sciences will win. It also has a huge channel presence in CRC which will enable it to be successful in both fecal and blood-based CRC testing. In addition, with 60 million Americans not receiving any CRC screening at all, there is ample opportunity for multiple players to win.”
A research team in a laboratory discussing the results of a lab screening test for biomarkers.
Exact Sciences Corporation (NASDAQ:EXAS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held Exact Sciences Corporation (NASDAQ:EXAS) at the end of the fourth quarter compared to 41 in the third quarter. Exact Sciences Corporation’s (NASDAQ:EXAS) first quarter revenue experienced 11% rise on reported and core basis exceeding the mid pint of guidance over $19 million. While we acknowledge the potential of Exact Sciences Corporation (NASDAQ:EXAS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Exact Sciences Corporation (NASDAQ:EXAS) and shared the list of high P/E stocks that Insiders are buying. In addition, please check out our hedge fund investor letters Q1 2025 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.
