Baron Funds, an asset management firm, published its “Baron Real Estate Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. A modest decline of 1.66% was delivered by the fund’s institutional shares for the third quarter of 2021, marginally underperforming its primary benchmark index, the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”), and the MSCI US REIT Index (the “REIT Index”), which increased 0.10% and 0.75%, respectively. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Baron Funds, in its Q3 2021 investor letter, mentioned Caesars Entertainment, Inc. (NASDAQ: CZR) and discussed its stance on the firm. Caesars Entertainment, Inc. is a Reno, Nevada-based gaming company with a $23.8 billion market capitalization. CZR delivered a 50.45% return since the beginning of the year, while its 12-month returns are up by 122.99%. The stock closed at $111.74 per share on November 2, 2021.
Here is what Baron Funds has to say about Caesars Entertainment, Inc. in its Q3 2021 investor letter:
“Caesars Entertainment Corporation: Caesars is the largest and most diversified casino gaming and entertainment company in the U.S. The company manages 47 casino properties across 13 states and 5 countries and has a #1 or #2 market share position in most markets. Brands include Caesars, Harrah’s, Planet Hollywood, Paris Las Vegas, and Nobu Hotel, among others. Led by highly regarded CEO Tom Reeg, we believe Caesar’s has several opportunities to continue to drive strong cash flow growth and create value through operational improvements, sports betting market share growth, real estate asset sales, debt reduction, and ongoing investments in customer engagement, its hotel room products, and digital technology.”
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Based on our calculations, Caesars Entertainment, Inc. (NASDAQ: CZR) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. CZR was in 73 hedge fund portfolios at the end of the first half of 2021, compared to 76 funds in the previous quarter. Caesars Entertainment, Inc. (NASDAQ: CZR) delivered a 28.76% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
