Here’s Why Baron Funds Bought More Schrödinger (SDGR) Shares

Baron Funds, an asset management firm, published its “Baron Growth Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 0.94% was delivered by the fund’s institutional shares for the Q1 of 2021, trailing its primary benchmark, the Russell 2000 Growth Index, that rose to 4.88% and the S&P 500 Index that delivered a 6.17% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Baron Growth Fund, in its Q1 2021 investor letter, mentioned Schrödinger, Inc. (NASDAQ: SDGR), and shared their insights on the company. Schrödinger, Inc. is a US-based life sciences and materials science company that currently has a $4.2 billion market capitalization. Since the beginning of the year, SDGR delivered a -24.63% return, while its 12-month gains to 10.52%. As of May 12, 2021, the stock closed at $59.68 per share.

Here is what Baron Growth Fund has to say about Schrödinger, Inc. in its Q1 2021 investor letter:

“We also add opportunistically to existing positions where appropriate. This quarter’s abrupt focus on cyclical stocks presented an opportunity to add to several positions at particularly attractive valuations. Most notably, we added to our position in Schrodinger, Inc. when the stock declined following its conservative initial financial outlook after its extraordinary financial performance in 2020.”

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Our calculations show that Schrödinger, Inc. (NASDAQ: SDGR) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Schrödinger, Inc. was in 24 hedge fund portfolios. SDGR delivered a -45.10% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.