Is it Still Safe to Own Prologis (PLD) Shares?

Baron Funds, an asset management company, released its “Baron Real Estate Income Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. Baron Real Estate Income Fund (the “Fund”) declined 18.43% (Institutional Shares) in the second quarter of 2022, modestly underperforming its primary benchmark, the MSCI US REIT Index (the “REIT Index”), which declined 17.16%. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Baron Real Estate Income Fund mentioned Prologis, Inc. (NYSE:PLD) and explained its insights for the company. Founded in 1983, Prologis, Inc. (NYSE:PLD) is a San Francisco, California-based real estate investment trust company with an $84.1 billion market capitalization. Prologis, Inc. (NYSE:PLD) delivered a -32.48% return since the beginning of the year, while its 12-month returns are down by -12.64%. The stock closed at $113.67 per share on September 16, 2022.

Here is what Baron Real Estate Income Fund has to say about Prologis, Inc. (NYSE:PLD) in its Q2 2022 investor letter:

“In the second quarter, the shares of Prologis, Inc., the world’s largest industrial REIT, declined 29% as its valuation was reset for the higher interest rate environment and the possibility of still strong but perhaps moderating rent growth. On the other hand, the shares of Duke Realty Corporation, a $25 billion industrial REIT, declined only 7% in the second quarter, in large part because the company agreed to merge with Prologis at a 30% premium. We acquired additional shares in both companies in the most recent quarter. We are optimistic about the prospects for the combined Prologis/Duke Realty entity. Prologis is merging with its largest REIT competitor in Duke Realty. Duke’s industrial portfolio is among the best in industrial real estate. The company has an excellent track record in development and construction. We believe the merger has strategic and financial merits including acquiring a high-quality portfolio in mostly similar or attractive real estate markets and the likelihood of realizing both additional revenue and cost savings. We will have more to say on Prologis/Duke Realty in future shareholder letters.”


Our calculations show that Prologis, Inc. (NYSE:PLD) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Prologis, Inc. (NYSE:PLD) was in 49 hedge fund portfolios at the end of the second quarter of 2022, compared to 37 funds in the previous quarter. Prologis, Inc. (NYSE:PLD) delivered a 3.00% return in the past 3 months.

In September 2022, we also shared another hedge fund’s views on Prologis, Inc. (NYSE:PLD) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

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