Ron Baron

Ron Baron

Last Update: 09-12-2016

Number of Stocks: 301
Number of New Stocks: 22

Total Value: $18,810 Mil
Q/Q Turnover: 5%

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

Ron Baron Watch

  • Baron Asset Fund 3rd Quarter Shareholder Letter

    Equity markets were strong during the quarter ended September 30, 2016. Baron Asset Fund (the “Fund”) Retail Shares gained 5.06% and the Institutional Shares gained 5.15%; the Russell Midcap Growth Index (the “Index”) gained 4.59%, and the S&P 500 Index gained 3.85%.


  • Baron Funds Comments on Zillow Group

    We recently added to our existing position in Zillow Group, Inc. (NASDAQ:ZG) on a dip in the stock price following a disappointing earnings report, due in part to legal fees tied to a lawsuit with a competitor and in part to higher charges following the merger with one-time rival Trulia. We believed these headwinds were short-term and took the opportunity to increase our stake in the company. Zillow is the leading online real estate site in the U.S., offering information on homes for sale and rent through its various residential real estate-related websites. Given that its combined companies captures less than 5% of the $112 billion that real estate professionals spend on marketing each year, we think there is ample room for growth.

    From Baron Funds' fall 2016 newsletter.


  • Baron Funds Comments on Under Armour

    From time to time, we have opportunities to purchase stocks of businesses that we have researched extensively when the stock is mispriced due to a temporary issue, in our view. Athletic apparel company Under Armour, Inc. (NYSE:UA) is one such example. The Fund recently took advantage of a weak share price to opportunistically re-initiate a position in the company. Various Baron Funds have owned Under Armour since its initial public offering in 2005. We believe the company’s strong brand resonates with consumers, its ability to drive innovation in performance apparel will lead to a growing category and increased market share, and the opportunities in its nascent footwear business and international markets are substantial.

    The company’s share price came under pressure due to the bankruptcy of Sports Authority, an important third-party distributor. We think this headwind is temporary, and consumers will shift their buying to online and other outlets. The bankruptcy also created an opportunity for Under Armour to sell more products directly to consumers through its website and company stores. We see a long runway of continued growth for Under Armour through these and other initiatives.

    From Baron Funds' fall 2016 newsletter.


  • Baron Funds Comments on Vail Resorts

    Another top 10 holding is ski resort company Vail Resorts, Inc. Vail (NYSE:MTN) has been upgrading its properties to offer new and higher quality services and amenities, which should help attract more visitors and allow it to increase lift ticket prices. It is also starting to offer more recreational summer activities, such as zip lines, mountain coasters, hiking, and biking tours, that should help reduce seasonal losses.

    Vail is also focused on increasing season pass sales. Currently, roughly 40% of Vail’s lift ticket revenue is from season passes, which helps immunize it from poor snowfall seasons. It has been aggressively acquiring ski resorts, which helps enhance the attractiveness of its multi-resort season passes. Resorts it has added to its network in the last several years include Park City in Utah (at a distressed sale price), Perisher in Australia, and, most recently, Whistler Blackcomb in Canada, the biggest ski area in North America. Vail is leveraging its expanding network of resorts to increase the number of season passes it sells by offering the option of multi-mountain passes. We believe Vail continues to enjoy exceptional competitive advantages and strong growth prospects because management remains focused on improving the customer experience and investing in the business.

    From Baron Funds' fall 2016 newsletter.


  • Baron Funds Comments on IDEXX Laboratories

    Top 10 holding IDEXX Laboratories, Inc. (NASDAQ:IDXX) is the leading provider of diagnostics to the veterinary industry. The company spends six times more on R&D annually than all its competitors combined. As a result, it has continuously improved its menu of diagnostics, which we believe is unsurpassed in the industry. IDEXX is benefiting from secular growth spending on pets, driven by favorable demographics, increased use of diagnostics, and an increasing focus on preventative care. The company’s products are sold via a razor/razorblade model, which produces high retention rates and incremental margins. We think that IDEXX’s direct go-to-market model coupled with meaningful R&D-driven product enhancements will continue to boost revenue and earnings growth over time.

    From Baron Funds' fall 2016 newsletter.


  • Baron Funds Comments on Tesla Motors

    Our second largest position is electric vehicle company Tesla Motors,Inc. (NASDAQ:TSLA). The company is run by someone we believe to be a true visionary, Elon Musk. We think Tesla has first mover advantage, the best talent pool in the industry, scale, and brand.

    While paving the way for transformation of the automotive industry in areas like electrification, safety, self-driving, connectivity, and more, Tesla has built an impressive brand awareness that will serve it for years to come, in our view. Tesla has invested in highly automated manufacturing facilities for its cars and batteries, innovations such as automated driving technology and a networked fleet, and other key initiatives aimed at building the world’s leading electric vehicle company. We believe that over the next decade, electric vehicles will be cheaper, better, and safer. Tesla is enabling the ride to this future; and with its first mover advantage, human capital, and a visionary leader, we believe it will take a significant share of the secular shift from gas-powered to electric vehicles.

    From Baron Funds' fall 2016 newsletter.


  • Baron Funds Comments on CoStar Group

    The Fund’s biggest position, CoStar Group, Inc. (NASDAQ:CSGP), is an information and marketing services provider to the commercial real estate industry. The company has built a proprietary database through primary research and data collection research over a 20-year period, creating high barriers to entry. We believe its investments in R&D and a doubling of the sales force will help increase customer penetration. In addition, CoStar has made two key strategic acquisitions – and ApartmentFinder – that we believe offer cross-sell synergies and will accelerate growth in the vast multi-family market. CoStar currently has retention rates in the low 90% range, giving great visibility into the future earnings stream. We believe margins will improve toward 50% given the high operating leverage.

    From Baron Funds' fall 2016 newsletter.


  • David Herro's Oakmark Global Fund 3rd Quarter Commentary

    An Atypical September Quarter

    The third quarter was full of events with negative market-moving potential (e.g., the coup attempt in Turkey, numerous incidents of terrorism, Syria’s agony, the U.S. election campaign), and given the stock market’s seasonal tendency to decline in the quarter, investors expected the period to be challenging. But as is so often the case, the market surprised, this time to the upside. Regular readers will recall that the previous quarter ended shortly after the Brexit vote shook the stock market’s equilibrium. As we noted three months ago, the Brexit vote itself was only the beginning of a process that could take up to two years once put into motion. To date, we believe the vote has done little discernible harm to the U.K.’s economy, and this has led investors to conclude that Brexit is just one more challenge with which to cope, rather than an existential threat to equity market and economic stability.


  • Baron Fund's Fall Newsletter: A High Conviction Approach to Investing

    During the past decade, increasing numbers of mutual fund investors have reallocated assets from actively managed products into passive equity strategies such as index funds and ETFs. There are several driving forces behind this trend, including the increasing variety of passive products available for investment, particularly ETFs. But the primary driver behind the movement of assets into passive investment strategies appears to be a generalized view that active managers, more often than not, underperform their benchmarks.


  • Baron Funds Comments on MonotaRO Co. Ltd.

    We currently own MonotaRO Co. Ltd. (TSE:3064) within the Industrials sector. Japan-based MonotaRO is an online distributor of machine tools, engine parts, and consumables for maintenance, repair, and operations (MRO) activity in Japan and is a strategic supply chain partner to Japanese businesses. U.S.-based W.W. Grainger is the company’s majority owner. Its online business model avoids the fixed costs of store-based competitors and allows it to pass on cost savings to its customers. We expect MonotaRO to continue to grow its share of the Japanese MRO segment and expand and compete in other large markets such as Korea.

    From Baron Funds' Second Quarter Insight: Finding Growth in Industrials.


  • Baron Funds Comments on SiteOne Landscape Supply

    We are also invested in SiteOne Landscape Supply, Inc. (NYSE:SITE), the largest wholesale distributor of landscape supplies in the U.S. The company operates a network of 477 branches in 44 states, offering a broad selection of products, including irrigation equipment, fertilizer, nursery goods, hardscapes and outdoor lighting. SiteOne is the market leader in an attractive industry with exposure to an improving market, and is also benefiting as increasing numbers of home owners treat outdoor space as an extension of their living space, with increasing investment in patios, decks and yards. The company is experiencing accelerated growth, yet with less than 10% of a fragmented market, we see significant potential for consolidation opportunities and accretive deals.

    Internationally, we favor distributors that we think are positioned to leverage the increasing globalization of the supply and distribution chain to their benefit. As this chain expands across countries and even continents, superior handling of the logistics can provide a key competitive advantage.


  • Baron Funds Comments on Fastenal Co.

    Fastenal Co. (NASDAQ:FAST) is a leading distributor of nuts, bolts, and threaded fasteners to manufacturers and contractors throughout North America. Since expanding its inventory mix over the last decade, Fastenal has taken market share from competitors as customers increasingly select the company as their exclusive supplier. Still, Fastenal has just 3% share of the large and fragmented industrial supplies space, leaving considerable room for expansion. The company’s recent vending initiative has grown to 50,000 automated machines directly embedded within customer facilities. These machines dispense frequently consumed products such as gloves and safety glasses directly at the point of use, an industry innovation that has helped Fastenal generate greater savings and accountability for customers, while driving industry-leading sales growth for itself.

    From Baron Funds' Second Quarter Insight: Finding Growth in Industrials.


  • Baron Funds Comments on Manitowoc Foodservice

    We invested in Manitowoc Foodservice, Inc. (NYSE:MFS), after its March 4, 2016 spinoff from its parent company, a restructuring designed to unlock the value of the parent’s less cyclical foodservice equipment business from its highly cyclical crane business. Like Middleby, Manitowoc is focused mainly on commercial and institutional foodservice operators, with leading positions in more than half of its brands. It manufactures and distributes an integrated portfolio of hot and cold category products and supplies. We believe the spinoff will allow Manitowoc’s new management team to focus exclusively on the core food equipment business and lift margins to industry levels through organic growth and restructuring. In addition, we think opportunity exists for Manitowoc to consolidate a fragmented industry.

    From Baron Funds' Second Quarter Insight: Finding Growth in Industrials.


  • Baron Funds Comments on The Middleby Corp

    We are invested in two foodservice equipment companies that we believe are well positioned to profit from the world’s evolving eating habits. The Middleby Corp. (NASDAQ:MIDD) manufactures cooking and warming equipment for commercial restaurants and institutional kitchens, as well as food processing and residential kitchen equipment. Middleby’s top-tier brands enjoy leading market positions. The company uses technological innovations to design and manufacture differentiated equipment for which customers are willing to pay a premium. It has a history of acquiring leading brands and technologies, including Viking Range, AGA Rangemaster Group plc, and most recently, Lynx Grills, and using its business expertise to improve their financial performance. Since 2001, Middleby has been led by Selim Bassoul, a passionate manager with a highly regarded leadership style who is widely credited with turning the company around.

    From Baron Funds' Second Quarter Insight: Finding Growth in Industrials.


  • Baron Funds Comments on Acuity Brands

    We are also invested in Acuity Brands, Inc. (NYSE:AYI), North America’s leading provider of innovative lighting systems. With solid brands and an extensive agency network, we believe Acuity stands to benefit from secular demand for more energy-efficient lighting, generated by government regulations and tax savings in the near term and significant cost savings in the long term. Acuity services the commercial real estate construction industry, and with lighting comprising 21% of energy use in commercial buildings, we see additional potential growth driven by the trend toward “smart” buildings and cities, and the retrofit opportunity for older, less efficient structures.

    From Baron Funds' Second Quarter Insight: Finding Growth in Industrials.


  • Baron Funds 2nd Quarter Insight: Finding Growth in Industrials

    In Modern Times, Charlie Chaplin’s masterful 1936 comedy, industrialization was depicted as synonymous with modernity, and, in many ways, at the time it was. In the years that followed, however, the U.S. economy gradually evolved. As seen in the chart below, manufacturing as a percentage of overall GDP has steadily declined over the decades, and currently stands at about 11% today.


  • Ron Baron Boosts Position in Inovalon

    Ron Baron (Trades, Portfolio) of Baron Funds further increased his position in Inovalon Holdings Inc. (NASDAQ:INOV) by 12.35% on Aug. 31.

    Baron founded Baron Capital Management in 1982 and serves as CEO, CIO and trustee. He is a co-portfolio manager of Baron Asset Funds and the portfolio manager of the Growth and Partners Funds. He likes to invest in companies with open-ended growth and defensible niches. He applies bottom-up company research, invests for the long term and purchases companies at what he believes are attractive prices. On average, Baron holds investments longer than five years.


  • Ron Baron Buys Under Armour in 2nd Quarter

    Ron Baron (Trades, Portfolio), founder of Baron Asset Management and co-portfolio manager of the Baron Partners Fund, invests in companies using a long-term investing approach.

    The fund seeks capital appreciation through focused research on the company’s management and long-term growth opportunities. During the second quarter, Baron took stakes in Under Armour Inc. (NYSE:UA.C), Red Rock Resorts Inc. (NASDAQ:RRR) and MGM Growth Properties LLC (NYSE:MGP). Additionally, the fund manager increased his position in Gaming and Leisure Properties Inc. (NASDAQ:GLPI).


  • Baron Funds Comments on BATS Global Markets

    BATS Global Markets, Inc. (BATS) operates financial exchanges and electronic marketplaces for trading equities, options, and foreign currency (“FX”) in the U.S. and Europe. We invested in the company during its IPO in April. We view BATS as a low-cost provider in an attractive industry with numerous growth opportunities.


  • Baron Funds Comments on Red Rock Resorts

    Red Rock Resorts, Inc. (NASDAQ:RRR) is the leading owner/operator of “locals” casinos in the Las Vegas market, with nine major casinos and 10 smaller neighborhood properties. The company, which used to be known as Station Casinos, recently returned to the public markets after going private in 2007, and we reinvested in its IPO.


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