Baron Real Estate Fund Added Floor & Decor Holdings, Inc. (FND) on A Dip

Baron Funds, an investment management company, released its “Baron Real Estate Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund delivered strong results in the quarter. The fund appreciated 10.25% (Institutional Shares) compared to the MSCI US REIT Index’s (the REIT Index) 4.49% and the MSCI USA IMI Extended Real Estate Index’s 5.65%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Baron Real Estate Fund highlighted stocks such as Floor & Decor Holdings, Inc. (NYSE:FND). Floor & Decor Holdings, Inc. (NYSE:FND) is a multi-channel specialty retailer of hard surface flooring and related accessories. The one-month return of Floor & Decor Holdings, Inc. (NYSE:FND) was -14.20%, and its shares lost 40.63% of their value over the last 52 weeks. On November 11, 2025, Floor & Decor Holdings, Inc. (NYSE:FND) stock closed at $60.79 per share, with a market capitalization of $6.55 billion.

Baron Real Estate Fund stated the following regarding Floor & Decor Holdings, Inc. (NYSE:FND) in its third quarter 2025 investor letter:

"Following a sharp decline in its shares in the first six months of 2025, we began acquiring shares of Floor & Decor Holdings, Inc. (NYSE:FND), a specialty retailer and commercial flooring distributor of hard-surface flooring (tile, vinyl, wood, stone, and laminate) and accessories.

We are excited about the medium-term prospects for Floor & Decor for several reasons: 1. Competitively advantaged company. Customers prefer the company’s “everyday low pricing” and unmatched breadth of inventory in-stock. “Everyday low pricing” stems from the company’s direct overseas sourcing model, which leads to a low-cost advantage relative to peers, which gets passed through to customers. Unmatched breadth of inventory stems from the company’s large format stores (78,000 square feet), which can carry 4,000 stock-keeping units (SKUs), which is three to four times the typical home improvement store…” (Click here to read the full text)

Floor & Decor Holdings, Inc. (NYSE:FND) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 46 hedge fund portfolios held Floor & Decor Holdings, Inc. (NYSE:FND) at the end of the second quarter, up from 44 in the previous quarter.  Floor & Decor Holdings, Inc.’s (NYSE:FND) sales for the third quarter grew 5.5% to $1.180 billion. While we acknowledge the potential of Floor & Decor Holdings, Inc. (NYSE:FND) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Floor & Decor Holdings, Inc. (NYSE:FND) and shared Montaka Global Investments' views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2025 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.