Ron Baron

Ron Baron

Last Update: 06-10-2016

Number of Stocks: 296
Number of New Stocks: 23

Total Value: $18,898 Mil
Q/Q Turnover: 5%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Ron Baron Watch

  • Under Armour's P/S Ratio Near Its 10-Year Low

    Under Armour Inc. (NYSE:UA) is traded at P/S ratio of 3.66, close to its 10-year low of 3.56. The company is owned by eight gurus.


    Under Armour has a market cap of $16.74 billion; its shares were traded around $38.32 with a P/E ratio of 64.64 and P/S ratio of 3.67. Under Armour had an annual average earnings growth of 23.50% over the past 10 years. GuruFocus rated Under Armour the business predictability rank of 5-star.

      


  • Conflicting Views Exist About the Tesla-SolarCity Acquisition

    Tesla Motors Inc. (NASDAQ:TSLA) announced an all-stock merger with SolarCity Corp. (NASDAQ:SCTY) for $2.8 billion on June 21.


    This deal provoked conflicting views among the CEO, analysts and investors. Although the acquisition appears to benefit the two companies in terms of synergies, the deal has an overall negative financial impact.

      


  • Ron Baron: Under Armour Set to Grow, Netflix a Mistake

    Ron Baron (Trades, Portfolio), founder of Baron Funds, said he has made 10-12 times his money and bought Under Armour (NYSE:UA) as its gone down. He believes the stock will go from $5 billion to $20 billion in 8-10 years with a good profit margin like Nike (NYSE:NKE) and Amazon (NASDAQ:AMZN). He also said he misunderstood Netflix (NASDAQ:NFLX) so he sold it at $80, right before it increased sharply.

      


  • Ron Baron: Stocks Are Cheap Right Now

    Ron Baron (Trades, Portfolio), founder of Baron Funds, told CNBC Tuesday that previous market corrections have made investors scared. He also holds the less popular opinion that stocks are cheap as a result although the S&P 500 is near an all-time high:
      


  • Baron Funds Comments on China Everbright Ltd.

    China Everbright Ltd. (SHSE:601818), an asset management firm that has grown assets under management (AUM) at a 30% CAGR over the last five years, is another example. According to market research firm Oliver Wyman, as of 2013, just 3% of China’s RMB 145 trillion in investable assets was held in mutual funds. As investment constraints for institutional/state-owned investors are relaxed, Chinese households shift from saving to investing, and China pushes to internationalize the RMB, AUM in China are expected to grow from RMB 4 trillion in 2013 to RMB 24 trillion in 2020. In addition, we believe low interest rates driven by the government’s economic stimulus will compel more households to move assets out of traditional, low-yielding products such as savings accounts into professionally managed products. Taken together, we believe these trends represent a massive opportunity for fund managers such as China Everbright.


    From Baron Funds' May 2016 Baron Insight: Investing in Financials.

      


  • Baron Funds Comments on Credicorp Ltd.

    We invest in Financials companies located overseas through our three international funds. In addition to our traditional investment criteria, we look for companies that are poised to benefit from secular or structural growth opportunities in their regional markets. For instance, we own Credicorp Ltd. (NYSE:BAP), the largest financial services company in Peru, with dominant positions in banking, insurance, and asset management. In addition to a high quality management team and a track record of delivering solid profitability, we think Credicorp stands to benefit from two major secular trends: an increase in banking penetration and favorable demographics. Peru is still vastly underserved in terms of financial services, with a loan/GDP ratio of roughly 27%, among the lowest in Latin America, implying significant room for banks to increase lending. In addition, a population with a young, but increasing, median age; a reduction in poverty levels; and a gradual formalization of the labor force will boost demand for financial services, in our view.


    From Baron Funds' May 2016 Baron Insight: Investing in Financials.

      


  • Baron Funds Comments on MarketAxess Holdings Inc.

    Technology is also transforming the capital markets. Trading across asset classes continues to migrate away from trading pits and phones to electronic venues. Regulatory changes enacted after the global financial crisis have accelerated this shift as higher capital and liquidity requirements for banks have restricted their ability to act as effective market-makers. MarketAxess Holdings Inc. (NASDAQ:MKTX) operates the dominant electronic platform for trading corporate bonds. We believe the corporate bond market is in the early innings of a secular shift from voice-based trading to electronic trading, and that MarketAxess will be the prime beneficiary of this transition.


    From Baron Funds' May 2016 Baron Insight: Investing in Financials.

      


  • Baron Funds Comments on Worldpay Group

    London-based Worldpay Group plc (NYSE:WPG) is the largest merchant acquirer in Europe, serving a diverse set of 400,000 merchants across 146 countries in 126 currencies. The company is the dominant player in the attractive U.K. payments market and has a fast growing and highly profitable e-commerce business that’s benefiting from the rapid growth of online commerce.


    From Baron Funds' May 2016 Baron Insight: Investing in Financials.

      


  • Baron Funds Comments on Vantiv Inc.

    Further down the payments value chain sit merchant acquirers and processors, who act as the “sales and distribution” arm of the payments industry. Acquirers enable merchants to accept credit and debit card payments by connecting them to the various networks. Vantiv, Inc. (NYSE:VNTV) is a leading merchant acquirer and payment processor in the U.S. that directly benefits from growth in consumer spending and the secular shift from cash to electronic payments. The company is gaining share due to investments in integrated payments technology and e-commerce capabilities. A significant industry shift toward chip-based, EMV cards should drive continued strong organic growth, in our view.


    From Baron Funds' May 2016 Baron Insight: Investing in Financials.

      


  • Baron Funds Comments on Primerica Inc.

    Primerica, Inc. (NYSE:PRI) also serves a growing need for financial planning in an underserved customer segment. The company provides term life insurance and third-party investment products to middle income households that are often ignored by other financial companies. Primerica has a multi-level sales model that positions the company to reach middle income investors in a cost-efficient manner and help them set and achieve their financial goals.


    From Baron Funds' May 2016 Baron Insight: Investing in Financials.

      


  • Baron Funds Comments on Charles Schwab Corp

    We are also investors in The Charles Schwab Corp. (NYSE:SCHW), a premier discount brokerage firm offering securities brokerage and other financial services to individual investors and independent financial advisors. We have owned this company since 1992, when the stock was trading at a split adjusted price of around $1 per share. Today, it trades at more than 30 times that amount. Despite this impressive growth, we feel the company still has many opportunities ahead. Management’s emphasis on earning customer trust has made it, in our view, a sterling brand. We believe its premium brand and superior services will allow Schwab to continue winning share in its core business. Additionally, the Investor Services division has broadened its offerings to include investment management and advice. Its recently released product, Schwab Intelligent Portfolio, manages a client’s assets for no additional cost by utilizing proprietary product and the Schwab bank. We believe this complimentary service will be difficult for rivals to match and will create sticky and valuable customer relationships.


    From Baron Funds' May 2016 Baron Insight: Investing in Financials.

      


  • Baron Funds Comments on Financial Engines

    Several of the companies we own service the growing need for investment advice among individual investors. Financial Engines, Inc. (NASDAQ:FNGN) is an advisory service for employees of participating employer retirement plans. While it is the significant market leader, it still has just $115 billion in 401(k) assets under management in a highly fragmented market. Its relationships with plan record keepers provide access to over $3 trillion in assets and its products are applicable to the vast majority of these accounts. We think Financial Engines has a long runway of growth as more plan sponsors provide their employees with access to its products, individual investors utilize its services, and new channels of distribution are opened beyond the retirement space.


    From Baron Funds' May 2016 Baron Insight: Investing in Financials.

      


  • Baron Funds Comments on First Republic Bank

    We’re also invested in First Republic Bank (NYSE:FRC), which provides banking and wealth management services to affluent customers in urban, coastal markets across the U.S. First Republic was founded 30 years ago, acquired in 2007 by Merrill Lynch (which subsequently merged with Bank of America), and spun off as a separate company again in 2010. First Republic differentiates itself through its singular focus on providing exceptional customer service, resulting in high customer loyalty and superior growth. The bank is well-capitalized and is led by an experienced management team that has demonstrated superior underwriting performance over many years. First Republic’s stock has risen over 160% since its IPO in 2010 as its high-touch business model and affluent customer base have driven strong market share gains.


    From Baron Funds' May 2016 Baron Insight: Investing in Financials.

      


  • Baron Funds Comments on Arch Capital Group Ltd.

    We own Arch Capital Group Ltd. (NASDAQ:ACGL), a specialty insurance and reinsurance company run by an experienced management team with a successful track record across several insurance cycles. Arch excels at underwriting specialized property & casualty policies and can shift its business mix to target the most profitable areas. The company has a unique compensation system for its underwriters that rewards long-term profitability rather than short-term premium growth. Management has demonstrated excellent underwriting discipline and has returned excess capital to shareholders during soft pricing cycles, allowing Arch to maintain industry-leading returns on equity. Its stock has doubled in the last five years.


    From Baron Funds' May 2016 Baron Insight: Investing in Financials.

      


  • Baron Insight: Investing in Financials

    The Financials sector has lagged significantly since the 2007-08 financial crisis. As of March 31, 2016, the category was down 14% since its October 9, 2007 peak, compared with the broader market as measured by the Russell 3000 Index, which increased 59%. Many financial companies experienced subdued profitability and growth in the aftermath of the crisis as a result of heightened regulation, fines, and historically low interest rates. Most recently, credit risk in the energy space has weighed on the sector. The decreasing likelihood of near-term U.S. Federal Reserve rate hikes has not helped either.

      


  • Many of Ron Baron's 1st-Quarter Divestitures Are Overvalued Today

    Ron Baron (Trades, Portfolio) of Baron Funds sold more than 40 stakes in the first quarter. Many of his largest divestitures are overvalued today, according to the DCF Calculator.


    Baron’s most noteworthy sale of the first quarter was the divestiture of his 12,971,289-share stake in ITC Holdings Corp. (NYSE:ITC), the Novi, Michigan-based parent company of ITC Transmission, for an average price of $40.55 per share. The deal had a -2.36% impact on Baron’s portfolio.

      


  • Tallgrass Energy Partners Insider Adds to Stake

    David Dehaemers Jr. (Insider Trades), CEO and president of Tallgrass Energy Partners LP (TEP), purchased 5,300 shares of the company on May 26. The price per share was $45.11 for a total transaction of $239,083.


    Tallgrass Energy Partners and Tallgrass Energy GP, LP are collectively referred to as Tallgrass Energy. Tallgrass Energy Partners is a limited partnership formed to own, operate, acquire and develop midstream energy assets in North America. Tallgrass Energy provides crude oil transportation to customers in Wyoming, Colorado and surrounding regions through Pony Express, which owns the crude oil pipeline, Pony Express System. Tallgrass Energy has a market cap of $3.18 billion and a P/S ratio of 5.74.

      


  • Baron Funds Comments on Bristol-Myers Squibb

    After watching and following Bristol-Myers Squibb (NYSE:BMY) for the better part of the last three years we used the weakness in the stock created by the sell-off in the biotech sector to finally initiate a small to medium size position. Bristol specializes in small molecule drugs known as biologics, which are harder for the generic drug companies to replicate, and we are particularly excited about its lead immuno-oncology asset, Opdivo which has shown incredible promise in the treatment of lung cancer, while growing 10-20% month over month since its approval in 2015. Based on our belief in the effectiveness of the PD-1 class drugs, we think there is a high likelihood that Bristol will be able to gain approvals and expand the usage of Opdivo in other types of cancers (melanoma, renal, head and neck, hodgkin’s lymphoma, etc.) and could potentially change the paradigm of cancer’s treatment worldwide.


    From Baron Fifth Avenue Growth Fund first quarter commentary 2016.

      


  • Baron Funds Comments on Illumina Inc.

    Shares of Illumina, Inc. (NASDAQ:ILMN) detracted from performance in the first quarter. Illumina is the leading provider of DNA sequencing technology to academic and commercial laboratories. Although fourth quarter financial results were solid, management tempered expectations for the first quarter HiSeq X and benchtop instrument sales. We continue to believe Illumina has a long runway for growth, driven by increasing adoption of DNA sequencing in clinical markets such as cancer screening, diagnosis, and treatment.


    From Baron Fifth Avenue Growth Fund first quarter commentary 2016.

      


  • Baron Funds Comments on Regeneron Pharmaceuticals

    Shares of Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) fell in the first quarter as a result of the significant sell-off in the biotech/pharma space and a miss on the top and bottom lines versus the expected fourth quarter results. 2016 guidance for Eylea (its lead ophthalmology asset) was sharply down from 2015. Launch of its new cardiovascular drug, Praluent, has been slow, and it lost a court case involving the drug. We have trimmed our position but decided that Regeneron deserved benefit of the doubt. Given Sanofi’s 22% ownership and its reliance on company for R&D productivity, we believe Regeneron enjoys a privileged position in the biotech universe.


    From Baron Fifth Avenue Growth Fund first quarter commentary 2016.

      


  • Baron Funds Comments on Alexion Pharmaceuticals

    Shares of Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) fell in the first quarter as a result of the significant correction in the biotech/pharma space. Alexion develops treatments for rare diseases. Its high foreign exchange exposure and high multiple also pressured the stock. Overall, we believe there have been no significant changes to the fundamentals of Alexion’s investment thesis (innovative, exceptionally well-managed company with unique assets and pricing power) and we retain conviction.


    From Baron Fifth Avenue Growth Fund first quarter commentary 2016.

      


  • Baron Funds Comments on Alexion Pharmaceuticals

    Shares of Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) fell in the first quarter as a result of the significant correction in the biotech/pharma space. Alexion develops treatments for rare diseases. Its high foreign exchange exposure and high


    From Baron Fifth Avenue Growth Fund first quarter commentary 2016.

      


  • Baron Funds Comments on LinkedIn Corp

    LinkedIn Corp. (NYSE:LNKD) is the world’s largest online professional network. It has three business segments: Hiring Solutions, Marketing Solutions, and Premium Subscriptions, each serving different customers. Despite strong 4Q15 results, shares were down in the first quarter due to a weak 2016 outlook. After several quarters of inconsistent results, we believe management is finding it increasingly difficult to manage the complexity of three businesses. We exited the position.


    From Baron Fifth Avenue Growth Fund first quarter commentary 2016.

      


  • Baron Funds Comments on Amazon.com

    Shares of Amazon.com, Inc. (NASDAQ:AMZN), the world’s largest retailer, declined in the first quarter despite reporting strong revenue growth likely due to retail margins being lower than anticipated. Amazon has responded by instituting substantial fulfillment and supply chain fee increases for merchants on the platform. We estimate that these fee increases should start to alleviate the recent pressure on retail margins in the upcoming quarters. Amazon’s other major business segment, Amazon Web Services (AWS) continues to gain traction with enterprise customers, and over time, we expect AWS to be the larger contributor to value creation for the company.


    From Baron Fifth Avenue Growth Fund first quarter commentary 2016.

      


  • Baron Funds Comments on ASML Holding N.V.

    ASML Holding N.V. (NASDAQ:ASML) is a unique, near-monopoly company in semiconductor manufacturing. ASML’s equipment, which prints the tiniest circuits for chips, is used by nearly every manufacturer. Over the next few years, ASML plans to roll out equipment that can print circuits smaller than any other company. We believe over time its equipment will become indispensable and earnings will grow rapidly. Shares were up in the first quarter after management stated on its earnings call that it expects equipment orders to accelerate in the second half of 2016.


    From Baron Fifth Avenue Growth Fund first quarter commentary 2016.

      


  • Baron Funds Comments on YUM! Brands

    Shares of YUM! Brands, Inc., (NYSE:YUM) a global operator and franchisor of the Pizza Hut, Taco Bell, and KFC restaurant brands, were up in the first quarter as the date of its spin-out of its struggling Chinese business approaches. News that private equity funds are considering investing in YUM! China lent support to estimates around the value of that business. We believe the ex-China operation is a high-quality, capital-efficient franchising business with continued growth potential and the Chinese business offers some optionality for a turn-around.


    From Baron Fifth Avenue Growth Fund first quarter commentary 2016.

      


  • Baron Funds Comments on Equinix Inc.

    Equinix, Inc., (NASDAQ:EQIX) an operator of carrier-neutral data centers, continued to make progress on several fronts: 1) the closing of its Telecity acquisition in Europe, 2) a strong finish to 2015 with organic growth beating analyst expectations, and 3) maintaining financial flexibility and a strong balance sheet in an uncertain market. In addition, supply/demand in the data center space is favorable and price accommodative with consolidation capping supply and cloud and outsourcing lifting demand. All of those contributed to an increase in the stock price in the first quarter.


    From Baron Fifth Avenue Growth Fund first quarter commentary 2016.

      


  • Baron Funds Comments on Brookfield Asset Management

    Shares of Brookfield Asset Management, Inc. (NYSE:BAM) rose in the first quarter due to strong conditions in most of its business segments. The company is a global alternative asset manager with approximately $200 billion in assets under management, with a focus on real estate property, infrastructure, renewable energy, and private equity. A high quality portfolio, stable cash flows and attractive growth opportunities, global scale, a quality balance sheet, and an excellent management team with significant insider ownership support our favorable view.


    From Baron Fifth Avenue Growth Fund first quarter 2016 commentary.

      


  • Baron Funds Comments on Facebook

    Shares of Facebook, Inc. (NASDAQ:FB), the world’s largest social network, rose in the first quarter, driven by improving consumer engagement and monetization. Facebook is the largest beneficiary of the shift in consumer engagement to mobile. Facebook is using its leadership position to provide global advertisers targeted marketing capabilities at scale. Facebook is in the early stages of monetizing online video and Instagram, which are starting to contribute to incremental revenue growth. WhatsApp and Oculus provide additional avenues for growth opportunities.


    From Baron Fifth Avenue Growth Fund first quarter 2016 commentary.

      


  • Ron Baron Exits Towers Watson

    Guru Ron Baron (Trades, Portfolio) sold his 762,284-share stake in Towers Watson & Co. (NASDAQ:TW) in the first quarter.


    In July 2015, Willis Group Holdings PLC and Towers Watson announced plans to form a $17 billion global professional services firm by merging the two companies. In early January, the company announced that the merger was successful and was conducting business as Willis Towers Watson, a leading global advisory, broking and solutions company.

      


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