Here’s Why Baron Funds Sold its Hydrofarm Holdings Group (HYFM) Position

Baron Funds, an asset management firm, published its “Baron Discovery Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly return of 3.13% was delivered by the fund’s institutional shares for the fourth quarter of 2021, which was better than the Russell 2000 Growth Index’s 0.01% return, but below the S&P 500 Index’s gain of 11.03% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Baron Discovery Fund, in its Q4 2021 investor letter, mentioned Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) and discussed its stance on the firm. Hydrofarm Holdings Group, Inc. is a Pennsylvania-based holding company with a $909.5 million market capitalization. HYFM delivered a -27.78% return since the beginning of the year, while its 12-month returns are down by -71.64%. The stock closed at $20.43 per share on January 20, 2022.

Here is what Baron Discovery Fund has to say about Hydrofarm Holdings Group, Inc. in its Q4 2021 investor letter:

“Our top 10 holdings represented 25.6% of the Fund’s net assets at the end of the fourth quarter. This is in line with historical weightings. Cash at the end of the quarter was 3.4%, which is in line with our low to mid-singledigit targeted levels. We exited our position in Hydrofarm Holdings Group, Inc. as we felt the macro headwinds the company was facing in its end-markets were both challenging and worsening.

Our calculations show that Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. HYFM was in 11 hedge fund portfolios at the end of the third quarter of 2021, compared to 15 funds in the previous quarter. Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) delivered a -43.47% return in the past 3 months.

In April 2021, we also shared another hedge fund’s views on HYFM in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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