Baron Funds, an investment management company, released its “Baron Real Estate Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund rose 6.17% (Institutional Shares) compared to a 4.90% return for the MSCI US REIT Index (the “REIT Index”) and an 8.71% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). For 2022, the fund declined 28.44% compared to a 23.84% decline for the MSCI Real Estate Index and a 25.37% decline for the REIT Index. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Funds highlighted stocks like Lennar Corporation (NYSE:LEN) in the Q4 2022 investor letter. Headquartered in Miami, Florida, Lennar Corporation (NYSE:LEN) is a home builder. On January 30, 2023, Lennar Corporation (NYSE:LEN) stock closed at $99.22 per share. One-month return of Lennar Corporation (NYSE:LEN) was 7.87%, and its shares gained 3.69% of their value over the last 52 weeks. Lennar Corporation (NYSE:LEN) has a market capitalization of $28.187 billion.
Baron Funds made the following comment about Lennar Corporation (NYSE:LEN) in its Q4 2022 investor letter:
“In the fourth quarter of 2022, we increased the Fund’s exposure to residential-related companies by acquiring shares in two best-in-class homebuilders (Toll Brothers, Inc. and Lennar Corporation (NYSE:LEN)) and two best-in-class building products companies (Floor & Decor Holdings, Inc. and The Sherwin-Williams Company).
Lennar Corporation is the second-largest U.S. homebuilder with competitive scale advantages (including materials procurement and labor), an increasingly capital-light business model, a strong balance sheet, a strategic and forward-looking focus on technology investments, and an exceptional management team.
At its recent price, Lennar’s shares were valued at only 1.2 times our estimate of 2023 tangible book value of $77 – a large discount to its historical valuation range of 1.5 to 2.5 times tangible book value.
Despite the company’s strong and liquid balance sheet and a business strategy that generates tremendous cash flow, Lennar’s shares are valued at only 5 to 6 times cash flow versus a homebuilder such as NVR, Inc. which is valued at 15 times cash flow.”
STUDIO GRAND OUEST/Shutterstock.com
Lennar Corporation (NYSE:LEN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Lennar Corporation (NYSE:LEN) at the end of the third quarter, which was 47 in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
Suggested Articles:
- 12 Cash Rich Small Cap Stocks to Buy
- 12 Cash Rich Dividend Stocks To Buy
- 13 Cheap DRIP Stocks To Buy
Disclosure: None. This article is originally published at Insider Monkey.
