Baron Durable Advantage Fund Bets on Danaher Corporation (DHR) During Cyclical Challenges

Baron Fund, an investment management company, released its Q4 2025 letter for “Baron Durable Advantage Fund”. A copy of the letter can be downloaded here. The Fund returned 2.6% in the fourth quarter, which mirrored the S&P 500 Index’s 2.7% return. The Fund returned 16.6% in 2025, compared to 17.9% for the Index and 16.1% gain for the Peer Group, Morningstar Large Growth Category average. Moving to 2026, in an environment dominated by geopolitics, changing regulatory trends, and artificial intelligence, the Fund focuses on investing in high-quality, large-cap companies with solid competitive advantages, proven track record, and consistent shareholder returns. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Baron Durable Advantage Fund highlighted stocks like Danaher Corporation (NYSE:DHR). Danaher Corporation (NYSE:DHR) is a healthcare and life science tools company that operates through Biotechnology, Life Sciences, and Diagnostics segments. On February 11, 2026, Danaher Corporation (NYSE:DHR) stock closed at $219.98 per share. One-month return of Danaher Corporation (NYSE:DHR) was -8.30%, and its shares are up 8.05% over the past twelve months. Danaher Corporation (NYSE:DHR) has a market capitalization of $155.504 billion.

Baron Durable Advantage Fund stated the following regarding Danaher Corporation (NYSE:DHR) in its fourth quarter 2025 investor letter:

"We also added to our position in Danaher Corporation (NYSE:DHR). Danaher supplies life science tools for lab research, genomics, and bioprocessing/drug manufacturing. It also offers instruments to run clinical diagnostics in large core labs, hospitals, and at the point of care.

The stock has come under pressure in recent years along with the rest of the life science tools space due to several reasons: First, biotechnology funding had been constrained, and earlier-stage, discovery research had been under particular pressure. In addition, uncertainty around pharmaceutical tariffs and Most-Favored Nation drug pricing had been a headwind for large pharmaceutical companies. Second, National Institutes of Health (NIH) funding has been another area of softness, given the priority of the current administration in cutting university grant funding. Finally, China has been a weak geography. For Danaher, their clinical diagnostics business has been subject to volume-based procurement, which is leading to pricing pressure in the region. …” (Click here to read the full text)

Danaher Corporation (NYSE:DHR) is on 27th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 117 hedge fund portfolios held Danaher Corporation (NYSE:DHR) at the end of the third quarter, up from 115 in the previous quarter. In 2025, Danaher Corporation (NYSE:DHR) reported sales of $24.6 billion, and core revenue growth of 2%. While we acknowledge the potential of Danaher Corporation (NYSE:DHR) 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 Danaher Corporation (NYSE:DHR) and shared a list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q4 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.