Here’s Why Baron Small Cap Trimmed its Trade Desk (TTD) Position

Baron Funds, an asset management firm, published its “Baron Small Cap Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 2.67% was delivered by the fund’s institutional shares for the Q1 of 2021, trailing the S&P 500 Index, which appreciated 6.17%, and modestly underperforming the Russell 2000 Growth Index which rose 4.88% for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Baron Small Cap Fund, in its Q1 2021 investor letter, mentioned The Trade Desk, Inc. (NASDAQ: TTD), and shared their insights on the company. The Trade Desk, Inc. is a California-based software company that currently has a $24.6 billion market capitalization. Since the beginning of the year, TTD delivered a -35.39% return, while its 12-month gains are up by 72.49%. As of May 14, 2021, the stock closed at $517.49 per share.

Here is what Baron Small Cap Fund has to say about The Trade Desk, Inc. in its Q1 2021 investor letter:

The Trade Desk is a leading online platform that enables ad agencies to efficiently purchase advertising on digital media. The stock has been a monster for years but backed off this quarter over industry concerns that Google would move away from “cookies” as a way to track advertising. We believe that Trade Desk’s Unified ID product might fill that void so are not so concerned. We expect programmatic advertising on digital media to continue to grow rapidly and for Trade Desk to be a major enabler and beneficiary. We sold some stock during the quarter because the shares were highly valued on near-term expectations and also for market cap considerations.”

Our calculations show that The Trade Desk, Inc. (NASDAQ: TTD) 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, The Trade Desk, Inc. was in 35 hedge fund portfolios, compared to 23 funds in the third quarter. TTD delivered a -40.11% 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.