Baron Funds, an investment management company, released its “Baron Real Estate Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q1 2025, stocks were sold due to economic growth slowdown, inflation, and policymaking issues, including Baron Real Estate Fund®, without considering value. The fund declined 6.69% (Institutional Shares) in the quarter compared to a 3.11% decline for the MSCI USA IMI Extended Real Estate Index (the MSCI Real Estate Index) and a 0.76% gain for the MSCI US REIT Index (the REIT Index). In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Baron Real Estate Fund highlighted stocks such as Taylor Morrison Home Corporation (NYSE:TMHC). Taylor Morrison Home Corporation (NYSE:TMHC) is a US-based land developer and homebuilder. The one-month return of Taylor Morrison Home Corporation (NYSE:TMHC) was 4.41%, and its shares lost 1.95% of their value over the last 52 weeks. On May 14, 2025, Taylor Morrison Home Corporation (NYSE:TMHC) stock closed at $58.93 per share with a market capitalization of $5.915 billion.
Baron Real Estate Fund stated the following regarding Taylor Morrison Home Corporation (NYSE:TMHC) in its Q1 2025 investor letter:
“Taylor Morrison Home Corporation (NYSE:TMHC) is one of the nation’s leading homebuilders, with a diversified business mix across buyer type and price points. Management aspires to increase the size of the business by over 50% over the next three to four years.
It is valued at only 1.0 times tangible book value and a P/E multiple of less than 7 times earnings per share. We believe the valuation of Taylor Morrison may reach 1.5 to 1.7 times tangible book value, which would represent 50% to 75% upside over time. We believe a multiple of 1.5 to 1.7 times tangible book value will ultimately be warranted based on the company’s aspirations to generate consistent return on equity in the high teens.”
A residential home with a white picket fence, showcasing the high standards of construction.
Taylor Morrison Home Corporation (NYSE:TMHC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held Taylor Morrison Home Corporation (NYSE:TMHC) at the end of the fourth quarter which was 30 in the previous quarter. While we acknowledge the potential of Taylor Morrison Home Corporation (NYSE:TMHC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Taylor Morrison Home Corporation (NYSE:TMHC) and shared the list of best residential construction stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 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.
