Ron Baron

Ron Baron

Last Update: 08-15-2016

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

  • 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.

      


  • Baron Funds Comments on Penn National Gaming

    Penn National Gaming, Inc. (NASDAQ:PENN), the largest operator of regional casinos, fell in the quarter over concerns about subdued consumer spending and the company’s leveraged balance sheet. The company’s results have been quite strong, and the new projects they have opened recently in Kansas, Ohio, and Massachusetts have ramped up nicely and are earning good returns. We believe that the stock trades at a significant (one-third) discount to its asset value and that its balance sheet will improve materially from free cash flow generation and the repayment of loans advanced to an Indian tribe to build a new casino, which the company will manage going forward.

      


  • Baron Funds Comments on Mattress Firm Holding Corp

    Mattress Firm Holding Corp. (NASDAQ:MFRM), the dominant domestic retailer of mattresses, fell in the quarter after the company lowered its earnings guidance based on a weak retail environment and on one-off issues that we believe have subsequently been addressed. The company has moved up its plan to rebrand all its stores as Mattress Firm and rollout its national initiatives involving new merchandising, distribution, and advertising plans. We believe the company will succeed in its efforts, which should increase margins and generate significant free cash flow that will de-lever its balance sheet, all while continuing to build stores and generate positive same-store sales.

      


  • Baron Funds Comments on Houghton Mifflin Harcourt

    Houghton Mifflin Harcourt Company (NASDAQ:HMHC), a leading publisher of educational materials and solutions for K-12 schools, fell in the quarter over concerns about the pace of near-term growth. California appears to be stretching out the adoption of a new reading program, which will negatively impact company bookings and revenues this year. There are also some concerns about the market share the company will garner from this and other adoptions. We still believe that the company is on the cusp of significant growth in “post-plate” cash EBITDA, the metric of most import when valuing the business. We believe this will be driven by overall industry growth, the company maintaining its 40% market share of new orders, and the realization of much higher margins as the business gains scale and transforms from analog/print to digital/subscription. We believe the stock can increase multiple-fold if this plays out as we foresee, so we deem it worth the wait.

      


  • Baron Funds Comments on The Chef’s Warehouse

    The Chef’s Warehouse, Inc. (NASDAQ:CHEF), the leading food service distributor to high-end independent restaurants, fell in the quarter after the company reported mixed results. Though its core specialty business was strong, with organic growth of 7.5%, its nascent protein business had integration issues and suffered margin pressure. The company’s results have been spotty, which has led to volatile stock performance. . . strong in the first quarter, but now weak in the second. We believe that the company will work through these growing pains and will show more consistent results and earn higher margins. We remain excited about the company’s unique market position and its opportunity to consolidate the fine dining distribution niche. If they execute, the company should show sustainable continued profit growth and be rewarded with a higher trading multiple.


    From Baron Funds' Small Cap Fund second quarter 2016 shareholder letter.

      


  • Baron Funds Comments on Acuity Brands

    Acuity Brands, Inc. (ACY), the leading U.S. provider of lighting solutions, continued to post sensational results, with sales increasing 26% (up 14% on an organic basis) and profits increasing 53%. Acuity continues to benefit from the secular demand for more energy efficient lighting and the rapid adoption of LED lighting, which now accounts for 55% of its sales. Acuity is gaining share and making strategic acquisitions (Juno, Distec), which have increased the breadth of their product offerings, opened up new avenues of growth and been financially accretive. The company’s efforts to sell innovative, high margin integrated solutions, their “Tier 3 and Tier 4” offerings, are picking up steam, growing 40% this last quarter and now comprise 10% of revenues.


    From Baron Funds' Small Cap Fund second quarter 2016 shareholder letter.

      


  • Baron Funds Comments on IDEXX Laboratories

    IDEXX Laboratories, Inc. (NASDAQ:IDXX), the leading company in veterinary diagnostics, rallied in the second quarter after reporting strong financial results. Organic revenue growth was up 11%, driven by instrument revenue gains of 16% (and new placements up 25%), consumables’ sales up 12%, and reference labs sales up 15%. The company’s efforts to build a direct sales force and introduce new innovative products are showing terrific results. We expect revenue growth to accelerate as additional tests gain traction and the productivity of the new salesforce continues to improve. The company remained aggressive with its share repurchase program. We applaud the company’s plan to take on some leverage to buy in shares, especially as they bought at the lows, and since we believe the business is so stable and annuity-like that the balance sheet should have a reasonable amount of debt to optimize equity returns for the shareholders.

      


  • Baron Funds Comments on Press Ganey Holdings

    Press Ganey Holdings, Inc. (NYSE:PGND), the provider of patient experience and engagement measurement to operators of health care facilities, reported strong revenue and profit growth in the quarter, and the stock popped. Organic growth accelerated to 13% in its core patient experience. Business was driven by continued adoption of electronic surveys and market share gains. The company announced the acquisition of a direct competitor, which we believe can be greatly accretive once the clientele is migrated to Press Ganey’s platform. Management has many exciting new services that will be rolled out in the coming years, which, we believe, will supplement this strong core growth. We are particularly excited about the “transparency” product, which will independently rate staff physicians based on robust patient experience data. It is a product that we believe all hospitals could adopt, that patient/customers will highly value, and that could produce significant profit for Press Ganey.


    From Baron Funds' Small Cap Fund second quarter 2016 shareholder letter.

      


  • Baron Funds Comments on TransDigm Group Inc.

    TransDigm Group, Inc. (NYSE:TDG), the aircraft parts manufacturer (and the largest position in the Fund), reported that its crucial commercial aftermarket division grew revenues 13% on an organic basis in the quarter and its EBIDTA grew 28%. This was a significant improvement from the prior quarter and validated the company’s stance that the previous quarter’s results were an anomaly and that the company should be able to revert to its historic high single-digits organic revenue growth. TransDigm also announced that they repurchased $100 million of stock when the price was low and completed a significant $1 billion acquisition in the quarter. This is in keeping with other purchases of like businesses whose profitability has subsequently been considerably improved under TransDigm management.


    TransDigm recently held an analyst day that highlighted the incredible success the company has had and the cash flow machine they have built. By the way, equity value of the company has compounded at 33% for the 24 years since founding and the enterprise value of the company has grown from $50 million to $23 billion!

      


  • Ron Baron's Baron Funds Quarterly Report

    “That is the story of this country…the story of generations of people who felt the lash of bondage, the shame of servitude, the sting of segregation, but who kept on striving…so that today I wake up every morning in a house that was built by slaves…and I watch my daughters…two beautiful intelligent black young women playing with their dogs on the White House lawn. So, look, don’t let anyone tell you that this country isn’t great, that somehow we need to make it great again. Because this right now is the greatest country on earth!” First Lady Michelle Obama. Democratic National Convention. July 25, 2016.

      


  • Ron Baron Boosts Stake in Alibaba

    Guru Ron Baron (Trades, Portfolio) boosted his stake in Alibaba (NYSE:BABA) during the second quarter for an average price of $78.27 per share.


    Since the addition, Alibaba has risen an estimated 22% in price. Baron now owns 816,738 shares in the company.

      


  • Baron Funds Comments on Amber Road

    Amber Road, Inc. (NYSE:AMBR) has been a long time holding of the Fund. It provides subscription software (SaaS) services delivered through the cloud that enables some of the largest companies in the world to navigate difficult trade regulation environments. Shares were crushed last year after revenue growth disappointed. But customer retention has been fantastic (in no small part due to the company’s unique database of tariffs, trade regulations and other laws which are constantly refreshed). And the order book is accelerating to the point where we believe that the company can start putting up high-teens revenue growth again. We had sold a majority of our position in 2015 (taking some tax losses when the business environment was uncertain). But we bought back the position near the lows (shares were trading at around 1.5x sales), when we perceived that the business was turning around.


    From Baron Discovery Fund's second quarter 2016 commentary.

      


  • Baron Funds Comments on Domino’s Pizza Group

    Domino’s Pizza Group plc (NYSE:DPZ) holds the exclusive master franchise for Domino’s Pizza stores in the U.K., Ireland and Switzerland. We became interested in the company when the stock traded lower due to Brexit fears. Our feeling is that the company still has great growth prospects with an opportunity to grow its store base in the U.K. from under 900 units to over 1,200 in five years. We also think that the company will continue to grow same store sales in the mid- to high-single digits. One reason why we believe this is that Domino’s Pizza customers in the U.S. and Australia order nine times per year on average. In the U.K., while rates have been increasing, customers currently order only five times per year. We think that, over time, this gap will continue to close, helping to lift same store sales in the process.


    From Baron Discovery Fund's second quarter 2016 commentary.

      


  • Baron Funds Comments on Isle of Capri Casinos

    Isle of Capri Casinos, Inc. (NASDAQ:ISLE) is an operator of regional casinos primarily in the Midwest and Southeast. We have known the company for many years and became interested when a new CEO was named. We believe the new CEO and his management team have the ability to improve the margins and cash flow of the business. In addition, we think the current valuation does not reflect the inherent value of the company’s real estate.


    From Baron Discovery Fund's second quarter 2016 commentary.

      


  • Baron Funds Comments on Flotek Industries

    Flotek Industries, Inc. (NYSE:FTK), a manufacturer of specialty chemicals primarily for the oilfield service sector, was added to in the quarter. The company has been a long-term holding in the Fund but we increased the position size as oil recovered and the company’s prospects improved. We are very excited about the growth the company is showing, especially in the Permian Basin in Western Texas. We believe the company’s earnings are depressed today but will recover in time and when that happens, the stock will be worth significantly more than it is today.


    From Baron Discovery Fund's second quarter 2016 commentary.

      


  • Baron Funds Comments on American Renal Associates Holdings

    American Renal Associates Holdings, Inc. (NYSE:ARA) is a health care services company that runs about two hundred dialysis centers in the United States. This was the first IPO we have participated in for a number of quarters, as it met our quality and return characteristic standards. American Renal Associates is far smaller than its two large competitors, but we believe that it has a solid business model that involves physician ownership in many of its centers. This leads to the company’s ability to attract and retain some of the best nephrologists in its markets.


    From Baron Discovery Fund's second quarter 2016 commentary.

      


  • Baron Funds Comments on Mellanox Technologies

    Mellanox Technologies, Ltd. (NASDAQ:MLNX) is a provider of high speed networking switches and related equipment. Its products serve two general markets with Infiniband products, typically used for “high performance” computing applications, and its standardized Ethernet products, used for general networking applications. We believe that, combined with the recent acquisition of EZChip (which produces specialized network protocol chips that help direct data traffic), Mellanox has a very strong technology market position. Shares were weak in the quarter due to concerns that Intel is incorporating Infiniband networking functionality in its own chips. While we account for some share loss in the company’s high performance markets, Mellanox is just starting its Ethernet penetration, and we believe that increased growth in Ethernet will more than compensate for this competitive threat. We believe shares are inexpensive, particularly after expected accretion on the EZChip deal, and we believe there is a lot of growth ahead for the company.


    From Baron Discovery Fund's second quarter 2016 commentary.

      


  • Baron Funds Comments on Barfresh Food Group

    Barfresh Food Group, Inc. (OTCPK:BRFH), a manufacturer and distributor of ready-to-blend beverages, was a detractor in the quarter. The company continues to make progress with its larger partners, PepsiCo and Sysco, but is still early in its product roll out, which may have disappointed some investors this quarter. We expect that to change as we get into early 2017, when we believe larger customers will move from the “testing phase” to the “roll-out phase.” We believe the potential opportunity for Barfresh is massive, so we continue to remain patient as the company executes on its business plan.


    From Baron Discovery Fund's second quarter 2016 commentary.

      


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