Baron Funds, an investment management company, released its “Baron Opportunity Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. In the first quarter, the fund outperformed the broader market and increased by 17.96% (Institutional Shares) compared to a 13.85% return for the Russell 3000 Growth Index and a 7.50% return for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Opportunity Fund highlighted stocks like GitLab Inc. (NASDAQ:GTLB) in the first quarter 2023 investor letter. Headquartered in San Francisco, California, GitLab Inc. (NASDAQ:GTLB) provides software for software development. On May 9, 2023, GitLab Inc. (NASDAQ:GTLB) stock closed at $31.08 per share. One-month return of GitLab Inc. (NASDAQ:GTLB) was -8.24%, and its shares lost 9.86% of their value over the last 52 weeks. GitLab Inc. (NASDAQ:GTLB) has a market capitalization of $4.718 billion.
Baron Opportunity Fund made the following comment about GitLab Inc. (NASDAQ:GTLB) in its Q1 2023 investor letter:
“We increased our position in GitLab Inc. (NASDAQ:GTLB) after a sharp pullback in the stock price following its fourth quarter earnings report. GitLab is a software platform that developers, IT professionals, and security teams use to manage all stages of the software development life cycle. While GitLab’s fourth quarter performance was solid, with 58% revenue growth, management issued disappointing 2023 revenue guidance. New customer growth was healthy, but GitLab saw lower expansion rates in its base product as some existing customers cut back on paid licenses to account for layoffs in their businesses, while others slowed purchasing in anticipation of lower developer hiring this year. Management is assuming this trend will continue through the remainder of 2023. Longer term, we believe GitLab can continue to gain share in the $40 billion software developer market because its ability to address all stages of the software life cycle in a single, unified application give it an advantage over point solutions. Shorter term, we see upside to the guidance as: (1) customers continue to upgrade to GitLab’s higher-priced product tier to add security and compliance features; (2) net new customer growth remains healthy; and (3) GitLab is implementing a price increase that should yield an acceleration in revenues toward the end of 2023 and into 2024. The company also continues to demonstrate solid operating leverage. We believe the price increase will help GitLab achieve profitability sooner than initially projected.”
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GitLab Inc. (NASDAQ:GTLB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held GitLab Inc. (NASDAQ:GTLB) at the end of the fourth quarter which was 40 in the previous quarter.
We discussed GitLab Inc. (NASDAQ:GTLB) in another article and shared Alger Small Cap Focus Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2023 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.
