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Why Baron Asset Fund expects Vail Resorts (MTN) Stock to Recover?

Baron Asset Fund recently published its first-quarter commentary – a copy of which can be downloaded here. During the first quarter of 2020, the Baron Asset Fund returned -16.63% (institutional shares). In comparison, the benchmark S&P 500 Index was down 19.60%, while the Russell Midcap Growth Index was down 20.04%.

In the said letter, Baron Asset Fund highlighted a few stocks and Vail Resorts Inc (NYSE:MTN) is one of them. Vail Resorts is a mountain resort company. Year-to-date, MTN stock lost 30.5% and on May 5th it had a closing price of $165.11. Its market cap is of $6.7 billion. Here is what Baron Asset Fund said:

“Shares of Vail Resorts, Inc., the global operator of ski resorts, declined as the company was forced to prematurely end its resorts’ ski season in mid-March because of the COVID-19 pandemic. Although this event will significantly impact Vail’s near-term earnings, we are confident that Vail will navigate through this disruption. The company retains a strong balance sheet and free cash flow profile. The company indicated that it will defer various capital investments and temporarily suspend its dividend in order to further strengthen its cash position. We expect its business to eventually recover.”

In Q4 2019, the number of bullish hedge fund positions on MTN stock decreased by about 15% from the previous quarter (see the chart here).

Disclosure: None. This article is originally published at Insider Monkey.

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