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Baron Funds: “Repay Holdings (RPAY) Now are Attractively Valued”

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Baron Funds, an asset management firm, published its “Baron Small Cap Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of 4.69% was delivered by the fund’s institutional shares for the fourth quarter of 2021 and 15.84% for the year. This well exceeded the returns of the Russell 2000 Growth Index (the “Index”), which was flat in the fourth quarter and up 2.83% for the year. This was a quarter and a year where small-cap stocks did worse than large caps. The S&P 500 Index gained 11.03% in the quarter and 28.71% for the year. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Baron Small Cap Fund, in its Q4 2021 investor letter, mentioned Repay Holdings Corporation (NASDAQ: RPAY) and discussed its stance on the firm. Repay Holdings Corporation is an Atlanta, Georgia-based holding company with a $1.7 billion market capitalization. RPAY delivered a -2.74% return since the beginning of the year, while its 12-month returns are down by -28.29%. The stock closed at $17.77 per share on February 11, 2022.

Here is what Baron Small Cap Fund has to say about Repay Holdings Corporation in its Q4 2021 investor letter:

"That payment company downdraft was also the reason for the decline in the shares of Repay Holdings Corporation this quarter. Repay provides integrated payment processing services for personal loans, auto loans, and receivables management. We like investing in small-cap payments businesses, as we have identified well-positioned, well-managed businesses that have strong market positions and recurring revenue business models. The companies have numerous growth opportunities–organically by further penetrating their segments and through acquisition. In our view, the stocks now are attractively valued as the segment is out of favor."

Our calculations show that Repay Holdings Corporation (NASDAQ: RPAY) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. RPAY was in 14 hedge fund portfolios at the end of the third quarter of 2021, compared to 17 funds in the previous quarter. Repay Holdings Corporation (NASDAQ: RPAY) delivered a -11.72% return in the past 3 months.

In November 2021, we published an article that includes RPAY in the 5 Stocks to Buy According to Cyrus De Weck’s Portsea Asset Management. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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