Is Sun Communities (SUI) a Resilient Investment?

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Baron Funds, an investment management company, released its “Baron Real Estate Income Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund rose 2.10% (Institutional Shares) compared to a 4.90% return for the MSCI US REIT Index (the “REIT Index”). For 2022, the fund declined 27.47% underperforming the benchmark which declined 25.37%. In addition, please check the fund’s top five holdings to know its best picks in 2022.

Baron Real Estate Income Fund highlighted stocks like Sun Communities, Inc. (NYSE:SUI) in the fourth quarter 2022 investor letter. Sun Communities, Inc. (NYSE:SUI) is a real estate management services provider. On March 13, 2023, Sun Communities, Inc. (NYSE:SUI) stock closed at $139.00 per share. One-month return of Sun Communities, Inc. (NYSE:SUI) was -12.53%, and its shares lost 19.45% of their value over the last 52 weeks. Sun Communities, Inc. (NYSE:SUI) has a market capitalization of $17.587 billion.

Baron Real Estate Income Fund made the following comment about Sun Communities, Inc. (NYSE:SUI) in its Q4 2022 investor letter:

"The shares of Sun Communities, Inc. (NYSE:SUI), a REIT that owns a portfolio of manufactured housing properties, recreational vehicle parks, and marinas, increased in the most recent quarter following strong quarterly business results coupled with management’s bright outlook for 2023 rent growth.

We believe the company is well positioned to continue to benefit from favorable demand and supply dynamics. The company is a beneficiary of strong demand from budget-conscious home buyers such as retirees and millennials, and negligible new inventory due to high development barriers. Demand for affordable outdoor vacations (recreational vehicles) also remains strong.

Sun Communities has strong long-term cash-flow growth prospects and low capital expenditure needs. If the macroeconomic environment worsens, we expect business results to be resilient due to the company’s focus on affordable housing and affordable outdoor vacations."

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Sun Communities, Inc. (NYSE:SUI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held Sun Communities, Inc. (NYSE:SUI) at the end of the fourth quarter which was 35 in the previous quarter.

We discussed Sun Communities, Inc. (NYSE:SUI) in another article and shared the list of real estate stocks to buy. In addition, please check out our hedge fund investor letters Q4 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.