Does Installed Building Products (IBP) Have Strong Growth Opportunities?
Baron Funds, an investment management company, released its “Baron Real Estate Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the first half of 2023, the fund rose 15.00% (Institutional Shares) compared to a 4.78% return for the MSCI US REIT Index (the “REIT Index”) and a 12.11% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). The fund rose 7.41%, modestly outperforming the indexes in the second quarter, which returned 2.34% and 7.04%, respectively, in the same period. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Real Estate Fund highlighted stocks like Installed Building Products, Inc. (NYSE:IBP) in the second quarter 2023 investor letter. Based in Columbus, Ohio, Installed Building Products, Inc. (NYSE:IBP) engages in installing insulation for the residential new construction market. On July 25, 2023, Installed Building Products, Inc. (NYSE:IBP) stock closed at $147.42 per share. One-month return of Installed Building Products, Inc. (NYSE:IBP) was 8.74%, and its shares gained 59.11% of their value over the last 52 weeks. Installed Building Products, Inc. (NYSE:IBP) has a market capitalization of $4.187 billion.
Baron Real Estate Fund made the following comment about Installed Building Products, Inc. (NYSE:IBP) in its second quarter 2023 investor letter:
"In the most recent quarter, we reacquired shares in Installed Building Products, Inc. (NYSE:IBP), one of the nation’s largest insulation installers for the residential new construction market. The company is also a diversified installer of complementary building products. IBP should be a prime beneficiary of growth in new home construction as approximately 77% of IBP’s business is generated from new housing construction (67% new single-family and 10% new multi-family). We believe the company has several opportunities for growth including:
(i) Expanding its approximately 30% market share of insulation for new residential construction organically by offering a superior customer experience. (ii) Expanding its less than 10% market share of complementary building products by leveraging its established insulation footprint for cross-selling (complementary building products currently represent 34% of sales); and (iii) Acquiring other businesses – IBP has a successful track record of acquiring and integrating more than 160 companies, realizing meaningful cost savings, and enhancing the growth and profitability of these acquired businesses.
We believe our investment in IBP has the potential to compound at 15% per year over the next few years."
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Installed Building Products, Inc. (NYSE:IBP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Installed Building Products, Inc. (NYSE:IBP) at the end of first quarter which was 20 in the previous quarter.
We discussed Installed Building Products, Inc. (NYSE:IBP) in another article and shared Baron Small Cap Fund’s insights on the company. In addition, please check out our hedge fund investor letters Q2 2023 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.
