Baron Funds, an investment management company, released its “Baron Opportunity Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund rose 4.04% (Institutional Shares), outperformed the Russell 3000 Growth Index, which gained 3.42%, and lagged the S&P 500 Index, which advanced 5.89%. In the first nine months ended 2024, the fund posted solid gains, rising 25.31% compared to a 24.00% return for the Russell 3000 Growth Index and beating the S&P 500 Index’s 22.08% gain. Due to a significant rotation away from large-cap Magnificent Seven stocks and toward value/cyclical and small-cap stocks, as well as generally positive economic data that supported the soft-landing narrative and the Federal Reserve’s long-awaited dovish pivot, U.S. stocks ended the quarter higher for the fourth consecutive quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Baron Opportunity Fund highlighted stocks like PAR Technology Corporation (NYSE:PAR) in the third quarter 2024 investor letter. PAR Technology Corporation (NYSE:PAR) offers omnichannel cloud-based hardware and software solutions to the restaurant and retail industries. The one-month return of PAR Technology Corporation (NYSE:PAR) was 13.58%, and its shares gained 109.86% of their value over the last 52 weeks. On October 24, 2024, PAR Technology Corporation (NYSE:PAR) stock closed at $59.72 per share with a market capitalization of $2.174 billion.
Baron Opportunity Fund stated the following regarding PAR Technology Corporation (NYSE:PAR) in its Q3 2024 investor letter:
“During the quarter we purchased shares of PAR Technology Corporation (NYSE:PAR), a leading software, hardware, and service provider to the foodservice industry. The restaurant industry has historically underinvested in technology, and PAR is building an all-in-one software platform for enterprise restaurants to run the most critical portions of their technology stacks. Within the past year, PAR completed the final steps of its multi-year organic and inorganic product journey championed by CEO Savneet Singh, selling off its non-core legacy government services business and acquiring online ordering, international, and convenience-store related products to complement its existing point-of-sale, loyalty, back office, and payments processing products. We believe PAR will grow its software revenues over 20% per year for the next several years, driven by wins with new restaurant brands and cross-sell of its product portfolio to existing customers, and faces benign competition in the industry, with legacy providers offering less-modern products and more modern competitors having limited success and track records with enterprise restaurant chains (over 50 locations). We project the company will report its first quarter of adjusted EBITDA profitability in the third quarter of 2024 and expect it to deliver strong operating leverage from revenue growth going forward. As PAR scales into vertical software-like margins in the coming years, driving a ramp in bottom line profitability and cash flow, we believe the stock should appreciate meaningfully.”
An engineer working in a tech lab, surrounded by tools and components.
PAR Technology Corporation (NYSE:PAR) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held PAR Technology Corporation (NYSE:PAR) at the end of the second quarter which was 28 in the previous quarter. In the June quarter, PAR Technology Corporation (NYSE:PAR) reported $78.2 million in revenues, representing 12% year-over-year growth. While we acknowledge the potential of PAR Technology Corporation (NYSE:PAR) 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 PAR Technology Corporation (NYSE:PAR) and shared NCG Small Cap Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.