Will The Macerich Company (MAC) be Able to Transform into a Company with Better Valuation?

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 The Macerich Company (NYSE:MAC). The Macerich Company (NYSE:MAC) is a self-managed and self-administered real estate investment trust (REIT). The one-month return of The Macerich Company (NYSE:MAC) was 6.40%, and its shares lost 2.80% of their value over the last 52 weeks.  On May 14, 2024, The Macerich Company (NYSE:MAC) stock closed at $15.62 per share with a market capitalization of $4.14 billion.

Baron Real Estate Fund stated the following regarding The Macerich Company (NYSE:MAC) in its Q1 2025 investor letter:

“The Macerich Company (NYSE:MAC) is a REIT that owns a portfolio of exceptionally high-quality malls in the U.S. Under a new management team, the company is undergoing a business transformation to improve portfolio quality, growth potential, and balance sheet health, which we believe will ultimately translate into an improved valuation multiple for the company.

It is valued at less than 10 times forward earnings (Funds from Operations or FFO), on depressed earnings, which is a discount to its historical norm of 15 to 17 times FFO.”

Aerial view of a shopping mall bustling with customers, symbolizing the impact of the company’s real estate portfolio.

The Macerich Company (NYSE:MAC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held The Macerich Company (NYSE:MAC) at the end of the fourth quarter which was 17 in the previous quarter. While we acknowledge the potential of The Macerich Company (NYSE:MAC) 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 The Macerich Company (NYSE:MAC) and shared Baron Discovery Fund’s views on the company in the previous quarter. 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.