Baron Funds, an investment management company, released its “Baron Real Estate Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund rose 6.17% (Institutional Shares) compared to a 4.90% return for the MSCI US REIT Index (the “REIT Index”) and an 8.71% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). For 2022, the fund declined 28.44% compared to a 23.84% decline for the MSCI Real Estate Index and a 25.37% decline for the REIT Index. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Baron Funds highlighted stocks like Toll Brothers, Inc. (NYSE:TOL) in the Q4 2022 investor letter. Headquartered in Fort Washington, Pennsylvania, Toll Brothers, Inc. (NYSE:TOL) is a home-building company. On January 30, 2023, Toll Brothers, Inc. (NYSE:TOL) stock closed at $56.49 per share. One-month return of Toll Brothers, Inc. (NYSE:TOL) was 11.68%, and its shares lost 4.53% of their value over the last 52 weeks. Toll Brothers, Inc. (NYSE:TOL) has a market capitalization of $6.246 billion.
Baron Funds made the following comment about Toll Brothers, Inc. (NYSE:TOL) in its Q4 2022 investor letter:
“Toll Brothers, Inc. (NYSE:TOL) is the leading luxury homebuilder in the U.S. with a capable management team as well as a large and valuable owned land portfolio. Toll Brothers is more insulated than its peers from elevated mortgage rates because 20% of the buyers of Toll homes pay 100% in cash.
At its year-end 2022 price of only $49.92/share, the company is valued at only 0.83 times our estimate of 2023 tangible book value of $60/share. Historically, Toll Brothers’ shares have been valued, on average, at 1.4 times book value and a peak multiple of approximately 2.0 times tangible book value. If the shares recover in the next few years and trade only to the company’s long-term average multiple of 1.4 times book value, Toll Brothers’ share price would increase 82% to $91 per share.”
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Toll Brothers, Inc. (NYSE:TOL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Toll Brothers, Inc. (NYSE:TOL) at the end of the third quarter, which was 29 in the previous quarter.
We discussed Toll Brothers, Inc. (NYSE:TOL) in another article and shared the list of stocks receiving price-target hikes from analysts. 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.
