What Makes Choice Hotels International (CHH) an Attractive Investment Bet?

What Makes Choice Hotels International (CHH) an Attractive Investment Bet?

Wed, September 9, 2026 at 4:55 PM GMT+3 3 min read

• CHH -0.75%
• ^RUT -0.78%

Baron Capital's Baron Generational Growth Fund® declined 2.51% for the quarter ended June 30, 2026, trailing the Russell 2000 Growth Index (25.71%) and Russell 3000 Index (15.44%). The letter can be downloaded here. Although the Fund maintains strong underlying earnings growth and solid portfolio fundamentals, returns were impacted by valuation compression as investors shifted towards riskier assets. Renamed this quarter to Generational Growth Fund to highlight its long-term focus, the Fund has generated a 10.89% annualized return since its 1994 inception, outperforming its benchmark by 2.26%. As of June 30, 2026, the Fund held 15 investments, with its top 10 holdings accounting for 104.8% of net assets. Please review the Fund's top five holdings to gain insights into its key selections for 2026.

In its second-quarter 2026 investor letter, Baron Generational Growth Fund highlighted Choice Hotels International, Inc. (NYSE:CHH). Choice Hotels International, Inc. (NYSE:CHH), a multinational hospitality company, contributed 0.77% to the Fund's performance this quarter. On September 08, 2026, Choice Hotels International, Inc. (NYSE:CHH) closed at $100.01 per share. Over the past month, Choice Hotels International, Inc. (NYSE:CHH) declined 5.24%, but its shares are down 11.09% over the past year. Choice Hotels International, Inc. (NYSE:CHH) has a market capitalization of $78.51 billion, and its stock has traded within a 52-week range of $84.04 to $123.82.

Baron Generational Growth Fund stated the following regarding Choice Hotels International, Inc. (NYSE:CHH) in its Q2 2026 investor letter:

"Global hotel franchisor Choice Hotels International, Inc. (NYSE:CHH) contributed to performance as revenue per available room accelerated throughout the quarter and management highlighted an increase in new hotel contract signings. This momentum should support stronger margins and cash flow and enable the company to step up share repurchases. Choice's balance sheet also remains solid, with financial leverage below targeted levels. Earnings and cash flow continue to improve, yet the stock still trades at historically low valuation multiples. We believe this disconnect leaves the shares attractive at current levels."

Choice Hotels International, Inc. (NYSE:CHH) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. According to our database, 29 hedge fund portfolios held Choice Hotels International, Inc. (NYSE:CHH) at the end of the second quarter, down from 33 in the previous quarter. While we acknowledge the potential of Choice Hotels International, Inc. (NYSE:CHH) 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 discussed Choice Hotels International, Inc. (NYSE:CHH) and shared Baron Capital's insights on the company from the previous quarter. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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This article is originally published at Insider Monkey.