Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund declined 13.4% (Institutional Shares) in the first quarter compared to a 10.0% decline for the Russell 1000 Growth Index and a 4.3% decrease for the S&P 500 Index. The Fund focuses on investing in Big Ideas, which often trade and can be considered long-duration assets. As a result, the portfolio frequently experiences significant stock price fluctuations, particularly in the short term and during periods of extreme market volatility, while the intrinsic values of businesses remain much more stable. Nevertheless, Q1 was a challenging first quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, Baron Fifth Avenue Growth Fund highlighted stocks such as Eli Lilly and Company (NYSE:LLY). Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company, headquartered in Indianapolis, Indiana. The one-month return of Eli Lilly and Company (NYSE:LLY) was 6.65%, and its shares lost 13.91% of their value over the last 52 weeks. On June 20, 2025, Eli Lilly and Company (NYSE:LLY) stock closed at $762.73 per share, with a market capitalization of $684.73 billion.
Baron Fifth Avenue Growth Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its Q1 2025 investor letter:
“During the quarter, we initiated a new position in Eli Lilly and Company (NYSE:LLY), a global pharmaceutical company currently best known for GLP-1 medications for diabetes and obesity.
Obesity is a significant public health problem in America with 74% of adults considered overweight, including 42% who are considered obese. Obesity is not just an “aesthetics” issue. Excess fat is the primary driver of metabolic syndrome conditions such as heart disease, stroke, and diabetes, as well as other comorbidities like sleep apnea, autoimmune diseases, osteoarthritis, and likely some types of cancers. All of these conditions cause significant morbidity and mortality. Obesity costs the U.S. health care system almost $173 billion in direct costs each year (source: CDC) and the annual indirect economic impact exceeds $1.4 trillion (source: Milken Institute).
The most recent generation of GLP-1 drugs (Lilly brand names Mounjaro/ Zepbound) not only offer superb blood sugar control for diabetics, but impressively can drive above 20% weight loss and likely improve cardiovascular outcomes in both diabetic and non-diabetic obese patients. These drugs have the potential to prevent a number of weight-related comorbidities and to transform patients’ lives…” (Click here to read the full text)
Eli Lilly and Company (NYSE:LLY) is in 21st position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 119 hedge fund portfolios held Eli Lilly and Company (NYSE:LLY) at the end of the first quarter, which was 115 in the previous quarter. Eli Lilly and Company (NYSE:LLY) reported strong results in first quarter of 2025, with revenue increasing 45% compared to Q1 2024. While we acknowledge the potential of Eli Lilly and Company (NYSE:LLY) 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 Eli Lilly and Company (NYSE:LLY) and shared billionaire Stan Druckenmiller’s stock picks with huge upside potential. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of LLY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
