Baron Funds, an investment management company, released its “Baron Discovery Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund appreciated 13.55% (Institutional Shares), outperforming the 8.41% return for the Russell 2000 Growth Index. Year-to-date, the fund returned 9.50% compared to the index’s 13.22% return. The firm was pleased with the fund’s performance in the third quarter and believes that the bear market in small-cap growth stocks, which began in February 2021, may finally end. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Discovery Fund highlighted stocks like Definitive Healthcare Corp. (NASDAQ:DH) in the third quarter 2024 investor letter. Definitive Healthcare Corp. (NASDAQ:DH) provides software as a service (SaaS) healthcare commercial intelligence platform. The one-month return of Definitive Healthcare Corp. (NASDAQ:DH) was -2.93%, and its shares lost 40.11% of their value over the last 52 weeks. On November 6, 2024, Definitive Healthcare Corp. (NASDAQ:DH) stock closed at $4.30 per share with a market capitalization of $503.629 million.
Baron Discovery Fund stated the following regarding Definitive Healthcare Corp. (NASDAQ:DH) in its Q3 2024 investor letter:
“We sold Definitive Healthcare Corp. (NASDAQ:DH) after owning the company for nearly three years, and it was a very unsuccessful investment despite having fantastic margins, solid free cash flow, and what we viewed as a high-quality health care database. Ultimately, the company will need to find a way to stop the slide in organic growth that has hurt equity value for shareholders.”
A healthcare professional in a meeting with a patient discussing care options using digital technology.
Definitive Healthcare Corp. (NASDAQ:DH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Definitive Healthcare Corp. (NASDAQ:DH) at the end of the second quarter which was 10 in the previous quarter. While we acknowledge the potential of Definitive Healthcare Corp. (NASDAQ:DH) 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 Definitive Healthcare Corp. (NASDAQ:DH) and shared the list of cheapest penny stocks to buy. 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.