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 Indie Semiconductor, Inc. (NASDAQ:INDI), in the third quarter 2024 investor letter. Indie Semiconductor, Inc. (NASDAQ:INDI) offers automotive semiconductors and software solutions. The one-month return of Indie Semiconductor, Inc. (NASDAQ:INDI) was -17.99%, and its shares lost 32.28% of their value over the last 52 weeks. On October 24, 2024, Indie Semiconductor, Inc. (NASDAQ:INDI) stock closed at $3.42 per share with a market capitalization of $617.04 million.
Baron Opportunity Fund stated the following regarding Indie Semiconductor, Inc. (NASDAQ:INDI) in its Q3 2024 investor letter:
“Indie Semiconductor, Inc. (NASDAQ:INDI) is a fabless designer, developer, and marketer of automotive semiconductors for advanced driver assistance systems (ADAS) and connected car, user experience, and electrification applications. Indie’s stock fell during the quarter as it guided 2024 revenue growth below Street expectations, as auto production is expected to be incrementally worse, and excess inventory in the automotive supply chains of its customers has delayed indie’s new chips from ramping into high-volume programs. Despite these near-term headwinds, indie is outperforming peers who are seeing significant year-over-year sales declines. It has not suffered a program cancellation for any intact car programs, and it continues to win new sockets in future car platforms, positioning the company for strong growth over the medium and long term, supported by its $6.3 billion design win backlog, of which $4.6 billion is in ADAS applications. Indie has several large-volume programs set to ramp beginning in early 2025, including a marquee radar-related win, the biggest program in the company’s history, which we believe will drive a return to outsized growth in 2025 (indie doubled revenue each year from 2021 through 2023). We believe indie can continue to significantly outpace the broader industry and will approach $1 billion in revenue by the end of this decade, all supported by its contracted visibility, and its stock will re-rate as rapid growth returns.”
A semiconductor chip with intricate circuitry, highlighting the company’s tech capabilities.
Indie Semiconductor, Inc. (NASDAQ:INDI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held Indie Semiconductor, Inc. (NASDAQ:INDI) at the end of the second quarter which was 15 in the previous quarter. While we acknowledge the potential of Indie Semiconductor, Inc. (NASDAQ:INDI) 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 Indie Semiconductor, Inc. (NASDAQ:INDI) and shared the list of worst falling stocks to buy. Indie Semiconductor, Inc. (NASDAQ:INDI) detracted from the performance of Baron Opportunity Fund in the Q1 2024. In addition, please check out our hedge fund investor letters Q3 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.