Strong Cash Flow Growth Lifted Welltower (WELL) in Q2
Baron Funds, an investment management company, released its “Baron Real Estate Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund declined 9.20% (Institutional Shares) in the second quarter compared to a 0.22% decline for the MSCI US REIT Index (the REIT Index) and a 4.03% decline for the MSCI USA IMI Extended Real Estate Index (the MSCI Real Estate Index). Some of the Fund's top performers from 2023 and the first quarter of 2024 experienced declines, partly due to concerns about slowing growth. This includes the shares of homebuilders, residential building product and services companies, casino and gaming operators, certain REITs, and other real estate-related companies. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Real Estate Fund highlighted stocks like Welltower Inc. (NYSE:WELL), in the second quarter 2024 investor letter. Welltower Inc. (NYSE:WELL) is a REIT that drives the transformation of healthcare infrastructure. The one-month return of Welltower Inc. (NYSE:WELL) was 8.83%, and its shares gained 46.03% of their value over the last 52 weeks. On August 28, 2024, Welltower Inc. (NYSE:WELL) stock closed at $121.07 per share with a market capitalization of $73.75 billion.
Baron Real Estate Fund stated the following regarding Welltower Inc. (NYSE:WELL) in its Q2 2024 investor letter:
"The shares of Welltower Inc. (NYSE:WELL) continued to perform well in the second quarter. Share price appreciation was driven by continued strong cash flow growth in its senior housing portfolio driven by strong occupancy and rent growth, solid execution on its highly accretive proprietarily sourced capital deployment opportunities, and an improved full-year growth outlook.
Welltower is a REIT that is an operator of senior housing, life science, and medical office real estate properties. We recently met with the entire Welltower senior management team and remain encouraged that the shares can continue to be a strong multi-year contributor for the Fund. We are optimistic about the prospects for both cyclical growth (a recovery from depressed occupancy levels following COVID-19) and secular growth (the senior portion of the population is the fastest growing portion of the population and people are living longer) in senior housing demand against a backdrop of muted supply that will lead to several years of compelling organic growth. Welltower is a “best-in-class” operator with a high-quality curated portfolio that is led by astute capital allocators, thereby allowing it to capture outsized organic and inorganic growth opportunities."
A real estate broker standing in front of an outpatient medical property.
Welltower Inc. (NYSE:WELL) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Welltower Inc. (NYSE:WELL) at the end of the second quarter which was 36 in the previous quarter. While we acknowledge the potential of Welltower Inc. (NYSE:WELL) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Welltower Inc. (NYSE:WELL) and shared the list of best real estate and realty stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q2 2024 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.