Ron Baron

Ron Baron

Last Update: 08-14-2015

Number of Stocks: 355
Number of New Stocks: 22

Total Value: $25,433 Mil
Q/Q Turnover: 6%

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

Ron Baron Watch

  • Baron Funds Comments on Manchester United Plc

    Manchester United plc (NYSE:MANU) is an English Premier League professional sports team that generates revenue from broadcasting, sponsorship, and licensing. Shares increased in the second quarter as Manchester United finished fourth in the English Premiere League, leaving them in place to potentially qualify for Champions League football competition. We also expect the company to benefit from future sponsorship deals and the roll-out of its Adidas partnership in the fall of 2015. Addidas will pay Manchester United about twice the fee Nike had previously paid. (Ashim Mehra)


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on Benefitfocus Inc.

    Shares of Benefitfocus, Inc. (NASDAQ:BNFT), a leading provider of cloud-based benefits software, contributed to performance. The company generated robust first quarter results and announced a reseller agreement with SAP, which we believe will be an important long-term accelerant to sales. The stock’s multiple has been expanding since February, when the company received a strategic investment from private exchange operator Mercer. We believe Benefitfocus serves an addressable market more than 100 times larger than its current business. (Neal Rosenberg)

      


  • Baron Funds Comments on Brookfield Infrastructure Partners LP

    Brookfield Infrastructure Partners L.P. (NYSE:BIP) owns and operates global infrastructure assets (utilities, towers, transport, etc.) and is 30% owned by Brookfield Asset Management. We like the predictable (i.e., recurring) cash flow stream, believe management’s effort in accelerating growth is likely to bear fruit and consider our purchase price at roughly 20% discount to NAV to be very attractive.


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on Naspers Ltd.

    Based in Cape Town, South Africa, Naspers Limited (JSE:NPN) is a $65 billion conglomerate with assets in Internet services, print, television, and digital media, as well as other technology services. Among its, in our view, impressive investment portfolio is a 34% stake in Chinese Internet powerhouse, Tencent, and a 29% stake in Russian Internet holding company Mail.ru. All in all, Naspers owns part or all of additional 140+ Internet assets. Their stake in publicly traded Tencent is worth a hair more than Naspers’ entire market cap. While we think Tencent may be close to fairly valued, and an appropriate holding company discount should apply, the optionality offered by Naspers’ other investments is enormous in our view, and we are not paying very much to own them.

      


  • Baron Funds Comments on SunEdison Inc.

    SunEdison, Inc. (NYSE:SUNE) is one of the largest alternative energy developers (solar, wind, and hydro) in the world. TerraForm Global (as well as TerraForm Power which is owned in the Baron Global Advantage Fund) is a “yieldco” created and majority owned by SunEdison for the purpose of owning the operating assets and producing and distributing cash flows to shareholders. The “yieldcos” serve to lower the cost of capital, which, in turn, increases the value of the specific project assets. TerraForm Global’s projects will be located in emerging markets, including Brazil, China, India, and South Africa. Expected to go public sometime in July, this “yieldco” should provide a new stream of cash flow to Sun Edison in the form of dividends and incentive distributions for many years to come. We believe both companies represent unique and compelling growth opportunities in a segment that, in our view, is poised for significant growth.


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on TerraForm Global Inc.

    TerraForm Global, Inc. (NASDAQ:GLBL) is a yield-oriented growth company known as a “yieldco” that owns a portfolio of long-term contracted renewable energy assets in emerging markets. Parent company SunEdison has a deep pipeline of assets that we expect to drive substantial growth. We invested in TerraForm Global in advance of its expected IPO in July of this year at a 5% discount to the IPO price. We took a roughly 7.6% illiquidity discount due to the fact that we won’t trade the stock for 180 days after the IPO. Once the lock-up ends, the illiquidity discount will go away.


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on Google Inc.

    Google, Inc. (NASDAQ:GOOG)’s shares declined 3.9% during the quarter for no particular reason, in our view. Investors seem to be getting concerned that search is becoming a mature business and perhaps is nearing saturation (at least the desktop part of it). While this is something we are paying close attention to, it is not central to our investment thesis on the company. We believe Google is probably the most innovative company we know, with the best business model and the greatest collection of talent in any one place in the world. Data is becoming increasingly more important and they own more than any other company we know. We think they will find ways to monetize that over time.

      


  • Baron Funds Comments on Wynn Resorts Ltd.

    Shares of Wynn Resorts Ltd. (NASDAQ:WYNN) decreased in the second quarter due to the slowdown in Macau and concerns over a smoking ban on VIP gaming expected to be enacted next year. The slowdown, combined with the unpredictability of how many tables Wynn will receive at its new casino opening in April 2016, led to our sale of the stock. While we think the company will still be able to finance and open the casino, the return may not be what investors expect and the increased supply could cannibalize existing assets.

      


  • Baron Funds Comments on LinkedIn Corp.

    LinkedIn Corp. (NYSE:LNKD) is the #1 professional networking platform, with over 350 million registered members. Shares declined 17.4% due to worse than expected quarterly results. The company also lowered guidance due to foreign exchange rates, an internal sales force transition, display advertising weakness, and the negative accounting treatment of a recent acquisition. We believe LinkedIn is a unique platform asset in the early days of capturing a $27 billion talent acquisition market and a $25 billion B2B advertising market, with interesting additional positive optionality.


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on Twitter Inc.

    What Twitter, Inc. (NYSE:TWTR) giveth – Twitter taketh away. After reporting strong December quarter results and an upbeat outlook, shares jumped 39.6% during the first quarter. Well… it turned out the upbeat outlook was a bit premature, as slower user growth and management’s apparent inability to execute on what most investors perceived as fairly low hanging fruit resulted in a loss of momentum, confidence and a 27.7% decline in the price of the stock. In last quarter’s letter, we commented that in our view, the probability of Twitter’s eventual success (or failure) was neither higher nor lower as a result of one good quarterly result. We feel similarly today, although we have to acknowledge that the ouster of the company’s CEO and the resulting management turmoil make a quick turnaround unlikely. Having said that, we continue to believe that Twitter is a unique and valuable communications platform for all major events unfolding live, in real time, around the world. It is still in the early stages of monetization and evolution as a platform, and we believe they will figure it out.


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on Starbucks Corp.

    Shares of Starbucks Corp. (NASDAQ:SBUX), the leading global specialty coffee company, marched to new highs after advancing 13.6%. Starbucks reported another quarter of strong sales and earnings growth. While the core in-store beverage business remains solid, we believe the company is just scratching the surface of its opportunity in food, mobile payment and loyalty programs, emerging market expansion, and wholesale channel development in single serve platforms.


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on FireEye Inc.

    FireEye, Inc. (NASDAQ:FEYE) is a next generation network security company that pioneered Advanced Persistent Threat Protection. The company has grown its sales by more than 10x over the last four years. FireEye’s shares continued their strong performance in the second quarter advancing 24.6%, as organizations around the world scrambled for solutions to growing cyber threats. We believe that FireEye has the best post-breach incident response service, which minimizes remediation time and damage and is the reason it is frequently the first call for companies that have been victimized. This service consistently gets FireEye into the door and gives them an opportunity to introduce and sell their other security products, potentially allowing them to build a real cybersecurity platform of the future.


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on Amazon.com Inc.

    Shares of Amazon.com, Inc. (NASDAQ:AMZN), our largest holding, rose 16.7% after the company reported better-than-anticipated operating results. As we suspected, Amazon Web Services was actually profitable (and meaningfully so) and the news was well received by investors who we believe were generally underweight the stock. With e-commerce representing around 10% of global retail sales, we believe the structural shift to online retailing represents a multi-year growth opportunity for Amazon.

      


  • Baron Funds Comments on Norwegian Cruise Line Holdings Ltd.

    In the quarter, we increased our position in Norwegian Cruise Line Holdings Ltd. (NASDAQ:NCLH), an operator of cruise ships under the Norwegian, Oceania and Regent Seven Seas brands, because we see strong synergies in their recent Prestige acquisition, which closed last November. We think there should be both revenue and cost synergies as the company should cross market the brands to its customers and continue to grow its market-leading yields. Norwegian also has an opportunity to significantly lower costs given no increased scale. Synergies combined with a strong pipeline of new ships coming online in each of the next five years should lead to higher yields and increased margins and free cash flow. Management has indicated they will use this excess free cash flow for possible share buybacks or the initiation of a dividend, both of which we view as positive for the stock. (David Baron)

      


  • Baron Funds Comments on Mobileye N.V.

    Mobileye N.V. (NYSE:MBLY) is a company we wrote about in previous letters following a visit to its headquarters in Jerusalem, Israel. While the history of Jerusalem is associated with many miracles, what we saw in this visit was the product of years of iterative engineering work, that will likely have a miraculous impact on road traffic safety. Sitting with Ziv, Mobileye’s CEO, in a car that drives itself while a newspaper was blocking his vision was clearly noticed by drivers all around us. It is hard to imagine that technology compressed this car’s driver into a 65x35x10 mm chip! Earlier this quarter, we visited the annual New York Auto show, where we were able to interview OEMs regarding their roadmap for safety features and autonomous driving. Based on our conversations, we see an accelerating acceptance for these features and we believe that Mobileye is in the driver’s seat of this market. (Gilad Shany)


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on Dick's Sporting Goods Inc.

    Shares of Dick’s Sporting Goods, Inc. (NYSE:DKS), the largest sporting goods retailer in the U.S., fell in the second quarter. Growth in same stores sales was burdened by the golf segment, a trend many had expected to reverse. We believe any turnaround in the golf business will be a huge help in improving the business and stock price. The segment has already improved its inventory positioning and lowered the amount of discounting, which we think is a move in the right direction. Other segments remain strong, and we retain conviction in Dick’s long-term prospects. (Michael Baron)


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on ITC Holdings Corp.

    Shares of ITC Holdings Corp. (NYSE:ITC), the nation’s largest independent transmission company, fell in the second quarter along with most of the utility sector over interest rate concerns. Company-specific issues, including a potential regulatory cut to the allowed return on equity and questions around ITC’s ability to execute on the development portion of its five-year capital expenditure plan, also weighed on the stock. We continue to hold the stock as we believe ITC has robust growth prospects and will execute on its growth strategy and capital expenditure plan. (Rebecca Ellin)

      


  • Baron Funds Comments on Arch Capital Group Ltd.

    Arch Capital Group Ltd. (NASDAQ:ACGL) is a specialty insurance and reinsurance company based in Bermuda. The company reported solid first quarter financial results with 15% growth in book value per share. Despite a soft reinsurance pricing environment, underwriting profitability remains strong, catastrophe losses remain benign, and the company continues to experience favorable reserve development. The share price has also benefited from mergers and acquisitions activity and speculation in the property and casualty insurance industry. (Josh Saltman)


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on Illumina Inc.

    Illumina, Inc. (NASDAQ:ILMN) is the leading provider of next generation DNA sequencing instruments and consumables. Shares rose on reports of better-than-expected revenue and earnings driven by strong sales of sequencing instruments. We maintain conviction because we believe Illumina holds a monopoly on DNA sequencing at a time when DNA sequencing is increasingly being used in cancer research and diagnosis and reproductive health. (Neal Kaufman)


    From Baron Funds' second quarter 2015 commentary.

      


  • Baron Funds Comments on Tesla Motors Inc.

    Shares of electric vehicle company Tesla Motors, Inc. (NASDAQ:TSLA) rose on an upbeat first quarter earnings report that included strong early results from the launch of Tesla Energy, its new commercial battery business. The early success of the entry level 70D model launch also helped boost Tesla’s share price. As a higher performing vehicle versus the lower-priced 60 model, which it replaced, we believe the 70D significantly expands Tesla’s addressable market. We also look forward to Tesla’s upcoming launch of the Model-X SUV. (Gilad Shany)


    From Baron Funds' second quarter 2015 commentary.

      


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