Baron Funds, an investment management company, released its “Baron Partners Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. Through the first nine months of the year, the fund modestly outperformed the Russel Midcap Growth Index. The last quarter caused the fund’s absolute and relative annual performance to be meaningfully lower than its long-term average. The fund declined 19.94% in the fourth quarter compared to the Russell Midcap Growth Index’s 6.90% return. For the calendar year, the fund returned -42.41% compared to a -26.72% return for the Index. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Partners Fund highlighted stocks like Tesla, Inc. (NASDAQ:TSLA) in the fourth quarter 2022 investor letter. Headquartered in Austin, Texas, Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle and energy generation and storage systems manufacturer. On February 21, 2023, Tesla, Inc. (NASDAQ:TSLA) stock closed at $197.37 per share. One-month return of Tesla, Inc. (NASDAQ:TSLA) was 36.65%, and its shares lost 22.50% of their value over the last 52 weeks. Tesla, Inc. (NASDAQ:TSLA) has a market capitalization of $624.498 billion.
Baron Partners Fund made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2022 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) declined 54% in the quarter and detracted 26.62% from the Fund’s overall performance. We initiated our position in Tesla in February 2014 at a split-adjusted price of $11.91. Over the subsequent two years, we acquired 16.65 million shares for an average split-adjusted price of $14.22. At the time of our final purchase in February 2016, the stock represented 9.6% of the Fund’s total investments.
Tesla produced approximately 35,000 vehicles in 2014, the year of our initial purchase. In 2022, it produced 1.37 million vehicles. Not only has its production grown tremendously, but it has also significantly increased profitability per vehicle. Tesla has expanded from producing high performance electric vehicles for wealthy aficionados to a company that produces affordable luxury cars for a sizable audience. In turn, it has transformed its industry. Investors rewarded this expansion in both production and profits, and the stock price increased to $265.25 at the end of the third quarter. Since 2016, we sold 4.5 million shares, or 27.0% of the original holding, at an average price of $218.39.
Investors have recently become concerned about many external factors. Elon Musk is Tesla’s founder and CEO. His purchase of Twitter has negatively impacted the perception of Tesla’s brand in the short term. China’s COVID policies and outbreak have paused purchases and production in the company’s largest region. Global recessionary fears and upcoming Inflation Reduction Act incentives also caused some to delay new vehicle purchases in various markets…” (Click here to read the full text)
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Tesla, Inc. (NASDAQ:TSLA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the fourth quarter which was 88 in the previous quarter.
We discussed Tesla, Inc. (NASDAQ:TSLA) in another article and shared Bireme Capital’s views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
