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Baron Funds: “Americold Realty (COLD) Still Trades at a Modest Cap Rate”

·3 min read

Baron Funds, an asset management firm, published its “Baron Small Cap Fund” second quarter 2022 investor letter – a copy of which can be downloaded here. Baron Small Cap Fund (the “Fund”) was down 18.60% (Institutional Shares) in the second quarter. The Fund modestly outperformed the Russell 2000 Growth Index, which was down 19.25% for the period, but lagged the S&P 500 Index, which was down 16.10%. Year-to-date, the Fund is down 31.36%, which trailed the Russell 2000 Growth Index and the S&P 500 Index, which were down 29.45% and 19.96%, respectively. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Baron Small Cap Fund mentioned Americold Realty Trust, Inc. (NYSE:COLD) and explained its insights for the company. Founded in 1997, Americold Realty Trust, Inc. (NYSE:COLD) is an Atlanta, Georgia-based real estate investment trust company with a $8.1 billion market capitalization. Americold Realty Trust, Inc. (NYSE:COLD) delivered a -7.99% return since the beginning of the year, while its 12-month returns are down by -14.53%. The stock closed at $30.17 per share on September 09, 2022.

Here is what Baron Small Cap Fund has to say about Americold Realty Trust, Inc. (NYSE:COLD) in its Q2 2022 investor letter:

"Americold Realty Trust contributed to our performance this quarter. Americold is a large owner/operator of cold storage facilities. The stock had lagged because of two issues: first, frozen food manufacturers and their customers had labor issues that restricted production and thus the need for storage; and second, the company had execution issues. It seems like industry trends are improving. Plus, the company is making progress increasing its productivity and improving margins, somewhat from the effect of hiring some new senior executives.

The stability of the business and the fact that it pays a nice dividend as a REIT is a positive in this market. Even after its recent pickup, we think the stock still trades at a modest cap rate and well below its private market value, so the stock can work via growth and multiple expansion."


STUDIO GRAND OUEST/Shutterstock.com

Our calculations show that Americold Realty Trust, Inc. (NYSE:COLD) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Americold Realty Trust, Inc. (NYSE:COLD) was in 13 hedge fund portfolios at the end of the second quarter of 2022, compared to 14 funds in the previous quarter. Americold Realty Trust, Inc. (NYSE:COLD) delivered a -0.10% return in the past 3 months.

In August 2022, we also shared another hedge fund’s views on Americold Realty Trust, Inc. (NYSE:COLD) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.