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Baron Funds: “Shift4 Payments (FOUR) is Not Yet Profitable and is Somewhat Capital Intensive”

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Baron Funds, an asset management firm, published its “Baron Small Cap Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron Small Cap Fund (the "Fund") did poorly in the first quarter, on both an absolute and relative basis. The Fund was down 15.68% (Institutional Shares), trailing the Russell 2000 Growth Index, which lost 12.63%, and the S&P 500 Index, which fell 4.60%. The Fund's longer-term performance is still admirable gaining 10.76% per year, on an annualized basis, over its almost 25-year history and besting the returns of its benchmark index for all relevant time periods. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Baron Small Cap Fund mentioned Shift4 Payments, Inc. (NYSE:FOUR) and explained its insights for the company. Founded in 1999, Shift4 Payments, Inc. (NYSE:FOUR) is an Allentown, Pennsylvania-based payment processing company with a $6.2 billion market capitalization. Shift4 Payments, Inc. (NYSE:FOUR) delivered a -18.37% return since the beginning of the year, while its 12-month returns are down by -46.92%. The stock closed at $47.29 per share on May 20, 2022.

Here is what Baron Small Cap Fund has to say about Shift4 Payments, Inc. (NYSE:FOUR) in its Q1 2022 investor letter: 

"We own on average 21% of our original position of the 10 largest cap positions. This past quarter, the weighted average market cap of stocks we purchased, both new positions and additions to existing positions was $3.2 billion. We sold out of or trimmed stocks with a weighted average market cap of $10.5 billion. During the quarter, we sold out of Shift4 Payments, Inc. (NYSE:FOUR), a fast-growing payments company. The business is not yet profitable and is somewhat capital intensive."

Our calculations show that Shift4 Payments, Inc. (NYSE:FOUR) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Shift4 Payments, Inc. (NYSE:FOUR) was in 30 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 32 funds in the previous quarter. Shift4 Payments, Inc. (NYSE:FOUR) delivered a -7.78% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Shift4 Payments, Inc. (NYSE:FOUR) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

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