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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 HealthEquity, Inc. (NASDAQ:HQY) and explained its insights for the company. Founded in 2002, HealthEquity, Inc. (NASDAQ:HQY) is a Draper, Utah-based financial technology and business services company with a $4.9 billion market capitalization. HealthEquity, Inc. (NASDAQ:HQY) delivered a 33.39% return since the beginning of the year, while its 12-month returns are down by -24.42%. The stock closed at $59.01 per share on May 19, 2022.
Here is what Baron Small Cap Fund has to say about HealthEquity, Inc. (NASDAQ:HQY) in its Q1 2022 investor letter:
"HealthEquity, Inc. (NASDAQ:HQY) is a leading administrator of Health Savings Accounts (HSA) and other consumer-directed employee benefits. Shares rose in the quarter after the company reported strong results, especially in the core HSA business (accounts were up 25%) where they are taking market share. There is a long runway of growth as the HSA market grows around 10%, and HealthEquity expects to outperform. Shares of HealthEquity traded down last year because the sizeable acquisition of WageWorks stumbled out of the gate, as COVID negatively affected some of its products. Now we think the company is seeing success with cross-selling efforts and the deal will turn out to be a winner. Higher interest rates should also boost earnings, possibly in a meaningful way."
Our calculations show that HealthEquity, Inc. (NASDAQ:HQY) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. HealthEquity, Inc. (NASDAQ:HQY) was in 26 hedge fund portfolios at the end of the fourth quarter of 2021. HealthEquity, Inc. (NASDAQ:HQY) delivered a 12.49% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on HealthEquity, Inc. (NASDAQ:HQY) 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.