Here’s Why Gartner Inc. (IT) Became a Top Contributor in Baron Fund’s Q4 Portfolio

Baron Funds, an investment management firm, published its fourth quarter 2020 “Baron Asset Fund” investor letter – a copy of which can be downloaded here. A return of 15.14% was recorded by its Retail Shares, and 15.21% by its Institutional Shares in the fourth quarter of 2020, both below its Russell Midcap Growth Benchmark that delivered a 19.02% return but above its S&P 500 index that was up by 12.15% in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Baron Funds, in their Q4 2020 investor letter, mentioned Gartner, Inc. (NYSE: IT) and emphasized their views on the company. Gartner, Inc. is a Stamford, Connecticut-based IT service management company that currently has a $16.2 billion market capitalization. Since the beginning of the year, IT delivered a 14.26% return, impressively extending its 12-month gains to 99.69%. As of March 22, 2021, the stock closed at $183.04 per share.

Here is what Baron Funds has to say about Gartner, Inc. in their Q4 2020 investor letter:

“Shares of Gartner, Inc., a provider of syndicated research primarily on information technology, increased after reporting financial results that exceeded analyst expectations. The company’s research business continued to generate growth, albeit at a slower rate than before the pandemic. We expect its growth to re-accelerate as economic conditions stabilize, which we believe will lead to meaningful margin expansion and enhanced free cash flow generation. While Gartner’s destination events business has been disrupted by the pandemic and the suspension of corporate travel, the company has pivoted to virtual events, which may offer enhanced economics over the long term.”

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Our calculations show that Gartner, Inc. (NYSE: IT) 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, Gartner, Inc. was in 37 hedge fund portfolios, compared to 38 funds in the third quarter. IT delivered a 17.01% return in the past 3 months.