Baron Funds, an investment management company, released its “Baron Discovery Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. Compared to the Russell 2000 Growth Index benchmark, which was slightly positive, the fund (institutional shares) was flat in the third quarter. In addition, please check the fund’s top five holdings to know its best picks in 2022.
In the third-quarter letter, Baron Funds discussed stocks like Petco Health and Wellness Company, Inc. (NASDAQ:WOOF). Headquartered in San Diego, California, Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) is a health and wellness company for pets. On October 28, 2022, Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) stock closed at $10.62 per share. One-month return of Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) was -7.84% and its shares lost 57.06% of their value over the last 52 weeks. Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) has a market capitalization of $2.822 billion.
Baron Funds made the following comment about Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) in its Q3 2022 investor letter:
“Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) is a pet supply retail chain. Shares were down during the quarter as the company reported earnings that missed analyst expectations. Strong sales in pet food and pet services (two categories that tend to be less discretionary) were more than offset by softer-than-expected sales in non-essential supplies and companion animals (both of which tend to be more discretionary). Given management’s expectation for continued consumer spending softness, the company lowered profit guidance for the remainder of the year. While pet food and pet services carry a higher lifetime value for Petco, these categories are also lower margin and so the mix shift towards these categories will be a shortterm drag on profitability. Despite these short-term challenges, we remain positive on Petco’s long-term growth prospects. Weakness in supplies and companion animals has been temporary in prior economic slowdowns and, as a result, should rebound over the coming quarters. At the same time, services continue to expand nicely as the company grows its veterinary practices. Lastly, Petco’s new store concept targeting rural communities is off to a strong start, setting the stage for a second growth concept going forward.”
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Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) at the end of the second quarter which was 23 in the previous quarter.
We discussed Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) in another article and shared the list of best young stocks to buy and hold for the next 20 years. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.
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