Baron Funds, an investment management company, released its “Baron Health Care Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. The fund declined 6.05% (Institutional Shares) in the quarter compared to a 3.88% loss for the Russell 3000 Health Care Index and a 3.27% loss for the S&P 500 Index. Year-to-date through September 30, 2023, the fund declined 1.17%, compared to a 3.83% decline for the Russell 3000 Health Care Index and a 13.07% increase for the S&P 500 Index. The combination of stock selection and active sub-industry weights drove the underperformance of the fund in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Health Care Fund highlighted stocks like Shockwave Medical, Inc. (NASDAQ:SWAV) in the third quarter 2023 investor letter. Headquartered in Santa Clara, California, Shockwave Medical, Inc. (NASDAQ:SWAV) is a medical device company. On October 18, 2023, Shockwave Medical, Inc. (NASDAQ:SWAV) stock closed at $206.70 per share. One-month return of Shockwave Medical, Inc. (NASDAQ:SWAV) was 5.65%, and its shares lost 23.21% of their value over the last 52 weeks. Shockwave Medical, Inc. (NASDAQ:SWAV) has a market capitalization of $7.632 billion.
Baron Health Care Fund made the following comment about Shockwave Medical, Inc. (NASDAQ:SWAV) in its Q3 2023 investor letter:
“We added to our position in Shockwave Medical, Inc. (NASDAQ:SWAV), a medical device company that sells products for the treatment of peripheral artery disease and coronary artery disease. The company’s catheters emit sonic waves to crack calcium in the plaque and open up the arteries (called intravascular lithotripsy or IVL). Shockwave is the only player on the market today with IVL catheters. Competing devices include plain balloons to push out plaque, and atherectomy, which uses blades or lasers to scrape away plaque. Plain balloons have difficulty removing hard, calcified plaque, and both of these alternative methods carry risks of damaging the artery. In contrast, IVL uses sonic waves to selectively target calcium plaque while leaving arteries undamaged. IVL also enables penetration deep into artery walls to crack hidden calcium. According to physicians, IVL is safe and easy to use, and adoption has been rapid, which has driven strong revenue growth for Shockwave. There is some uncertainty about the level of Medicare rates for IVL coronary artery procedures in the outpatient setting when a temporary add-on payment expires next year, but recently Medicare created new reimbursement codes specifically for IVL for the inpatient setting, which is encouraging. Meanwhile, Shockwave continues to advance its new product pipeline and expand in international markets. We think the company can grow revenue 20% or better for at least the next few years. The company is already highly profitable with higher than 20% operating margins and room to expand further.”
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Shockwave Medical, Inc. (NASDAQ:SWAV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Shockwave Medical, Inc. (NASDAQ:SWAV) at the end of second quarter which was 28 in the previous quarter.
We discussed Shockwave Medical, Inc. (NASDAQ:SWAV) in another article and shared TimesSquare U.S. Small Cap Growth Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q3 2023 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.