Baron Funds, an investment management company, released its “Baron Health Care Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned 2.54% (Institutional Shares) in the quarter compared to a 3.87% gain for the Russell 3000 Health Care Index (benchmark) and a 4.72% decline for the Russell 3000 Index (the Index). The fund trailed the benchmark due to stock selection and, to a lesser extent, active sub-industry weights. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Baron Health Care Fund highlighted stocks such as RadNet, Inc. (NASDAQ:RDNT). Headquartered in Los Angeles, California, RadNet, Inc. (NASDAQ:RDNT) provides outpatient diagnostic imaging services. One-month return of RadNet, Inc. (NASDAQ:RDNT) was 4.36%, and its shares gained 0.04% of their value over the last 52 weeks. On May 9, 2025, RadNet, Inc. (NASDAQ:RDNT) stock closed at $55.74 per share with a market capitalization of $4.181 billion.
Baron Health Care Fund stated the following regarding RadNet, Inc. (NASDAQ:RDNT) in its Q1 2025 investor letter:
“Higher exposure to lagging life sciences tools & services stocks and poor stock selection in health care services and managed health care were other material detractors in the period. The Fund’s only position in health care services, diagnostic imaging services provider RadNet, Inc. (NASDAQ:RDNT), weighed on performance after reporting below consensus guidance for fiscal year 2025. We view the reasons for the lower guidance as non-recurring and remain excited about the optionality embedded in RadNet’s AI products, which provide enhanced digital image reading and analysis, boosting radiologists’ accuracy and efficiency.”
A radiologist studying a monitor with a detailed image of a lung cancer tumor.
RadNet, Inc. (NASDAQ:RDNT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held RadNet, Inc. (NASDAQ:RDNT) at the end of the fourth quarter which was 20 in the previous quarter. In the fourth quarter, RadNet, Inc.’s (NASDAQ:RDNT) revenue increased 13.5% to $477.1 million and adjusted EBITDA increased 14% from Q4 2023 to $75 million. While we acknowledge the potential of RadNet, Inc. (NASDAQ:RDNT) 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.
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