Baron Funds, an investment management company, released its “Baron Discovery Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, the fund appreciated 6.20% (Institutional Shares), outperforming the 4.50% return for the Russell 2000 Growth Index. For the year ended December 31, 2024, the fund returned 16.28% compared to the index’s 15.15% return. Given the challenging start in the first half of the year, the fund was pleased with the outperformance of the fund in 2024. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Baron Discovery Fund highlighted stocks like CareDx, Inc (NASDAQ:CDNA) in the fourth quarter 2024 investor letter. Incorporated in 1998, CareDx, Inc (NASDAQ:CDNA) is involved in discovering, developing, and commercializing diagnostic solutions for transplant patients. The one-month return of CareDx, Inc (NASDAQ:CDNA) was 12.56%, and its shares gained 159.76% of their value over the last 52 weeks. On January 23, 2024, CareDx, Inc (NASDAQ:CDNA) stock closed at $23.43 per share with a market capitalization of $1.257 billion.

Baron Discovery Fund stated the following regarding CareDx, Inc (NASDAQ:CDNA) in its Q4 2024 investor letter:

"CareDx, Inc (NASDAQ:CDNA) is a diagnostic company that facilitates donor matches pre-organ transplant and rejection monitoring post-transplant. The market reacted poorly to the company’s Investor Day in October, with its preannouncement of quarterly results underwhelming expectations. And the stock was up over 100% in the prior quarter, leaving little room for disappointment. Short-term momentum shifts notwithstanding, our long-term investment thesis remains intact. We believe there is significant greenfield in the transplant diagnostics market alongside the backdrop of a cleaner reimbursement landscape."

A healthcare professional in front of a console, monitoring the progress of a transplant patient.

CareDx, Inc (NASDAQ:CDNA) is not on our list of 30 Most Popular Stocks Among Hedge Funds.As per our database, 24 hedge fund portfolios held CareDx, Inc (NASDAQ:CDNA) at the end of the third quarter which was 17 in the previous quarter. CareDx, Inc (NASDAQ:CDNA) reported revenue of $82.9 million in the third quarter, representing 23% year-over-year growth. While we acknowledge the potential of CareDx, Inc (NASDAQ:CDNA) 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.

Story Continues

In another article, we discussed CareDx, Inc (NASDAQ:CDNA) and shared Alger Small Cap Growth Fund's views on the company in the previous quarter. CareDx, Inc (NASDAQ:CDNA) contributed to Baron Discovery Fund's performance in the previous quarter. In addition, please check out our hedge fund investor letters Q3 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.

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