Baron Funds, an investment management company, released its “Baron Asset Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. US equities ended the quarter higher for the fourth quarter in a row. The Fed’s long-awaited interest rate cuts and generally positive economic data caused a significant shift from large-cap, Magnificent Seven, growth, and momentum stocks toward value, cyclical, and small-cap stocks. Against this backdrop, Baron Asset Fund returned 8.34% (Institutional Shares) in the quarter, outperforming the Russell Midcap Growth Index’s 6.54% return. The stock returns in the quarter were driven by Earnings Quality and the favorable environment for the firm’s investment strategy. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Asset Fund highlighted stocks like Fair Isaac Corporation (NYSE:FICO), in the third quarter 2024 investor letter. Fair Isaac Corporation (NYSE:FICO) develops analytic, software, and digital decision-making technologies and services. The one-month return of Fair Isaac Corporation (NYSE:FICO) was 4.90%, and its shares gained 133.43% of their value over the last 52 weeks. On October 29, 2024, Fair Isaac Corporation (NYSE:FICO) stock closed at $2,021.86 per share with a market capitalization of $49.851 billion.
Baron Asset Fund stated the following regarding Fair Isaac Corporation (NYSE:FICO) in its Q3 2024 investor letter:
“Shares of Fair Isaac Corporation (NYSE:FICO), a data and analytics company focused on predicting consumer behavior, contributed to performance. The company reported solid fiscal third quarter earnings results and raised its fiscal 2024 guidance. Management recently spoke at several conferences and expressed optimism about the trends in its two key divisions—scores and software. In addition, recent interest rate cuts are expected to lead to more mortgage activity and the associated need by lenders for more FICO credit scores. While some near-term areas of uncertainty remain (most notably scores volumes based on the timing of changing macroeconomic conditions and a potential CFPB investigation into scores pricing), we believe FICO will be a steady earnings compounder, which should drive solid returns over a multi-year period.”
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Fair Isaac Corporation (NYSE:FICO) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Fair Isaac Corporation (NYSE:FICO) at the end of the second quarter which was 45 in the previous quarter. In the third quarter of the fiscal year, Fair Isaac Corporation’s (NYSE:FICO) revenues increased by 12% to $448 million, while its GAAP net income decreased by 2% to $126 million, and GAAP earnings decreased by 1% to $5.05 per share. While we acknowledge the potential of Fair Isaac Corporation (NYSE:FICO) 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 Fair Isaac Corporation (NYSE:FICO) and shared the list of stocks to buy before they split next. Fair Isaac Corporation (NYSE:FICO) was the top contributor to the performance of Headwaters Capital Management during Q3 2024. Baron FinTech Fund stated in its Q2 2024 investor letter that Fair Isaac Corporation’s (NYSE:FICO) competitive advantages and potential for sustained profits growth would create strong long-term returns. 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.