Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund increased 3.6% (Institutional Shares) in the third quarter compared to a 3.2% gain for the Russell 1000 Growth Index and a 5.9% increase for the S&P 500 Index. Year to date, the fund returned 23.3% compared to 24.6% and 22.1% gains for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Fifth Avenue Growth Fund highlighted stocks like Samsara Inc. (NYSE:IOT) in the third quarter 2024 investor letter. Samsara Inc. (NYSE:IOT) offers solutions to connect physical operations data to its connected operations cloud. The one-month return of Samsara Inc. (NYSE:IOT) was 14.64%, and its shares gained 55.95% of their value over the last 52 weeks. On November 29, 2024, Samsara Inc. (NYSE:IOT) stock closed at $53.49 per share with a market capitalization of $29.899 billion.
Baron Fifth Avenue Growth Fund stated the following regarding Samsara Inc. (NYSE:IOT) in its Q3 2024 investor letter:
“Lastly, we initiated a position in Samsara Inc. (NYSE:IOT), which provides a cloud software platform for commercial vehicle telematics, video-based driver safety, driver workflow automation, and industrial equipment monitoring. Its software collects and analyzes data from sensors and cameras installed in its customers’ commercial trucks, construction equipment, warehouses, and other assets, helping companies visualize and improve the state of their operations. More than 17,500 customers in the transportation, field services, construction, utilities, and other industries have adopted Samsara, and last year the company became one of the fastest software companies ever to reach $1 billion in annual recurring revenue (ARR).
Samsara has been winning share from competitors in the $51 billion connected fleet software market due to its superior cloud native architecture, ability to address multiple use cases in a single platform, and its rapid product release cycle. Importantly, as Samsara continues to expand its connected asset base, it is building an unmatched data asset that it is using to drive better outcomes for its customers relative to competitors. Capturing more than 10 trillion data points from over 70 billion miles driven, Samsara uses AI to help companies optimize their vehicle routes, prevent accidents, improve asset utilization, reduce fuel expenses, and lower insurance premiums. In 2023, across its customer base, the company prevented 200,000 accidents and reduced carbon emissions by 2.3 billion pounds. Seeing a fast and tangible return on investment, customers have renewed and expanded their Samsara subscriptions at a healthy rate.
We see a long runway for growth as Samsara expands in existing accounts and wins new logos. Samsara is less than 50% penetrated in its existing customers’ vehicle fleets and has a significant opportunity to cross-sell newer non-vehicle products into its base. As it has scaled, Samsara has delivered healthy operating leverage, and we think free cash flow can expand to more than 20% longer term.”
A data analyst wearing virtual reality goggles while analyzing on-board telematics.
Samsara Inc. (NYSE:IOT) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Samsara Inc. (NYSE:IOT) at the end of the third quarter which was 26 in the previous quarter. While we acknowledge the potential of Samsara Inc. (NYSE:IOT) 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 Samsara Inc. (NYSE:IOT) and shared the list of most promising new technology stocks according to hedge funds. Artisan Mid Cap Fund established a position in Samsara Inc. (NYSE:IOT) during Q3 2024, due to its compelling value proposition and large market opportunity. 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.