What Makes CoStar Group (CSGP) Baron Focused Growth Fund’s Core Growth Investments?

Baron Funds, an investment management firm, released its “Focused Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Q1 was a difficult start to the year. The fund declined 7.95% (Institutional Shares) in the quarter, compared to the Russell 2500 Growth Index’s (the Benchmark) 10.80% return. Please spare some time to check the fund’s top 5 holdings to know more about their top bets for 2025.

In its first-quarter 2025 investor letter, Baron Focused Growth Fund highlighted stocks such as CoStar Group, Inc. (NASDAQ:CSGP). CoStar Group, Inc. (NASDAQ:CSGP) is an information, analytics, and online marketplace services provider for commercial and residential property markets. The one-month return of CoStar Group, Inc. (NASDAQ:CSGP) was -0.11%, and its shares lost 17.52% of their value over the last 52 weeks. On May 7, 2025, CoStar Group, Inc. (NASDAQ:CSGP) stock closed at $75.34 per share with a market capitalization of $31.785 billion.

Baron Focused Growth Fund stated the following regarding CoStar Group, Inc. (NASDAQ:CSGP) in its Q1 2025 investor letter:

“Core Growth investments, steady growers that continually invest in their businesses for growth and return excess free-cash-flow to shareholders, represented 21.9% of net assets. An example would be CoStar Group, Inc. (NASDAQ:CSGP), a marketing and data analytics provider to the real estate industry. The company continues to add new services in commercial and residential real estate, which have grown its addressable market and enhanced services for its clients. This has improved client retention and cash flow. CoStar continues to invest its cash flow in its business to accelerate growth, which we believe should generate strong returns over time.”

CoStar Group, Inc. (NASDAQ:CSGP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held CoStar Group, Inc. (NASDAQ:CSGP) at the end of the fourth quarter which was 43 in the previous quarter. In the first quarter of 2025, CoStar Group, Inc. (NASDAQ:CSGP) reported revenue of $732 million, reflecting a 12% increase from Q1 2024.  While we acknowledge the potential of CoStar Group, Inc. (NASDAQ:CSGP) 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 cheapest AI stock.

In another article, we covered CoStar Group, Inc. (NASDAQ:CSGP) and shared Third Point Management’s views on the company. 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.