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Is CBRE Group (CBRE) a Good Long-Term Investment?

Baron Funds, an investment management company, released its “Baron Real Estate Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund declined 4.86% (Institutional Shares) compared to a 4.99% decline for its primary benchmark, the MSCI USA IMI Extended Real Estate Index. At the same time, the fund outperformed the MSCI US REIT Index, which fell 10.28% in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2022.

Baron Funds highlighted stocks like CBRE Group, Inc. (NYSE:CBRE) in the Q3 2022 investor letter. Headquartered in Dallas, Texas, CBRE Group, Inc. (NYSE:CBRE) is a global real estate and investment company. On November 21, 2022, CBRE Group, Inc. (NYSE:CBRE) stock closed at $75.26 per share. One-month return of CBRE Group, Inc. (NYSE:CBRE) was 4.59%, and its shares lost 27.52% of their value over the last 52 weeks. CBRE Group, Inc. (NYSE:CBRE) has a market capitalization of $23.778 billion.

Baron Funds made the following comment about CBRE Group, Inc. (NYSE:CBRE) in its Q3 2022 investor letter:

"CBRE Group, Inc. (NYSE:CBRE) is the largest commercial real estate services firm in the world. It maintains a #1 worldwide market share position in each of its key business lines and has a pristine balance sheet. It is currently valued at only 13 times estimated 2023 earnings per share versus a long-term average valuation multiple of 15 to 16 times earnings per share.

In the most recent quarter, we trimmed the Fund’s position in CBRE Group, Inc., the largest commercial real estate services firm in the world. Though we believe segments of its business are currently facing headwinds (e.g., leasing and property sales), we remain bullish on the long-term growth prospects for CBRE. CBRE has scale, product breadth, and leadership positions across its diversified real estate business segments. The company continues to gain market share and is well positioned to capitalize on ample attractive acquisition opportunities in the years ahead given its strong and liquid balance sheet.

Though near-term growth in certain segments of its business is likely to moderate in the months ahead due to the global economic slowdown and higher interest rates, we believe CBRE shares are now attractively valued and present compelling return potential over the next few years."

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CBRE Group, Inc. (NYSE:CBRE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held CBRE Group, Inc. (NYSE:CBRE) at the end of the third quarter which was 42 in the previous quarter.

We discussed CBRE Group, Inc. (NYSE:CBRE) in another article and shared the list of undervalued stocks to buy according to Paul Tudor Jones. In addition, please check out our hedge fund investor letters Q3 2022 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.