Is it a Great Decision to Invest in WEX?

Baron Funds, an asset management firm, published its “Baron Small Cap Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron Small Cap Fund (the “Fund”) did poorly in the first quarter, on both an absolute and relative basis. The Fund was down 15.68% (Institutional Shares), trailing the Russell 2000 Growth Index, which lost 12.63%, and the S&P 500 Index, which fell 4.60%. The Fund’s longer-term performance is still admirable gaining 10.76% per year, on an annualized basis, over its almost 25-year history and besting the returns of its benchmark index for all relevant time periods. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Baron Small Cap Fund mentioned WEX Inc. (NYSE:WEX) and explained its insights for the company. Founded in 1983, WEX Inc. (NYSE:WEX) is a Portland, Maine-based IT service management company with a $7.1 billion market capitalization. WEX Inc. (NYSE:WEX) delivered a 12.74% return since the beginning of the year, while its 12-month returns are down by -16.54%. The stock closed at $158.28 per share on May 19, 2022.

Here is what Baron Small Cap Fund has to say about WEX Inc. (NYSE:WEX) in its Q1 2022 investor letter:

“WEX Inc. (NYSE:WEX) is a diversified business service company, which provides fuel cards, payments services, and benefits administration services. The shares rose this quarter after the company reported strong results that beat on the top and bottom line. Higher fuel prices benefited reported earnings, which was a big driver of improved stock performance. The company hosted an investor day during which management reiterated its long-term targets of 10% to 15% revenue growth and 15% to 20% earnings growth. The stock trades at under 15 times earnings. Management also outlined how the business can transition to serve electric vehicles over time and how the payments business should prosper with the expected uptick in travel.”

Photo by Austin Distel on Unsplash

Our calculations show that WEX Inc. (NYSE:WEX) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. WEX Inc. (NYSE:WEX) was in 32 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 19 funds in the previous quarter. WEX Inc. (NYSE:WEX) delivered a -5.30% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

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