Baron Funds, an investment management company, released its “Baron Discovery Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund (Institutional Shares) declined 7.78% underperforming the 2.92% return for the Russell 2000 Growth Index. The lion’s share of negative attribution and 6.52% of negative performance of the fund during the quarter were attributed to the ten worst-performing equities. The firm believes downward movements are more technically tied to macroeconomic issues and the trading environment and could quickly revert. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Discovery Fund highlighted stocks like CareDx, Inc (NASDAQ:CDNA) in the second quarter 2024 investor letter. Incorporated in 1998, CareDx, Inc (NASDAQ:CDNA) is involved in discovering, developing, and commercializing diagnostic solutions for transplant patients and their caregivers. The one-month return of CareDx, Inc (NASDAQ:CDNA) was 68.48%, and its shares gained 255.98% of their value over the last 52 weeks. On August 23, 2024, CareDx, Inc (NASDAQ:CDNA) stock closed at $31.54 per share with a market capitalization of $1.663 billion.
Baron Discovery Fund stated the following regarding CareDx, Inc (NASDAQ:CDNA) in its Q2 2024 investor letter:
“The Health Care sector was not all bad. During the year, we have seen many of our Health Care holdings rebound, showing that long-term fundamentals rather than short-term trading volatility is what truly matters. CareDx, Inc (NASDAQ:CDNA), which is the leading diagnostic testing lab serving the organ transplant industry, is up over 29% this year and 47.2% in the second quarter. This was due to the return of positive testing volume growth after a difficult period in 2023 precipitated by a proposed Medicare billing change. We believe these billing outcomes will be far better for CareDx than does the market, which is why we re-initiated our investment at purchases averaging under $10 per share (shares closed the quarter at $15.53) earlier this year. This was after shares dropped 74% from the beginning of 2022 to the end of 2023. As painful as it would have been for one to own these stocks in 2023, we are glad we stepped back to look at the longer-term picture with these companies. It would have been easy to sell at the bottom. Our process prevented that. Chaos equals opportunity.”
A healthcare professional in front of a console, monitoring the progress of a transplant patient.
CareDx, Inc (NASDAQ:CDNA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held CareDx, Inc (NASDAQ:CDNA) at the end of the second quarter which was 15 in the previous quarter. In the second quarter, CareDx, Inc (NASDAQ:CDNA) reported revenue of $92.3 million, a 31% increase compared to Q2 2023. While we acknowledge the potential of CareDx, Inc (NASDAQ:CDNA) 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 cheapest AI stock.
In another article, we discussed CareDx, Inc (NASDAQ:CDNA) and shared the list of best organ transplant and diagnosis stocks to buy. Baron Discovery Fund established a position in CareDx, Inc (NASDAQ:CDNA) during the first quarter of 2024. In addition, please check out our hedge fund investor letters Q2 2024 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.