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Why Baron Asset Fund in Bullish on Gartner (IT) Stock?

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 Gartner Inc (NYSE:IT) is one of them. Gartner is the world’s leading research and advisory company. Year-to-date, IT stock lost 24.2% and on May 5th it had a closing price of $115.99. Its market cap is of $10.4 billion. Here is what Baron Asset Fund said:

“Shares of Gartner, Inc., whose primary business is providing syndicated research on the IT sector, detracted from performance. Gartner has an events business that operates conferences for various constituencies in the IT sector. This unit, which represents approximately 11% of overall revenue, is likely to be meaningfully impacted by the COVID-19 pandemic. We believe that this headwind will prove to be transitory, and we expect the company to institute various cost reduction efforts in the meantime. We expect that the company’s core research business, which is largely recurring in nature, should remain resilient despite the elevated near-term economic uncertainty.”

In Q4 2019, the number of bullish hedge fund positions on IT stock increased by about 18% from the previous quarter (see the chart here).

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

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