He is now founder of Baron Capital Management which was first established in 1982. The firm engaged in two takeovers in 1984 but they were not successful.
His strategy essentially consists of investing in small and mid-size growth companies using a value-oriented purchase discipline. He applies a bottom-up company research, invests for the long-term and tries to invest in companies with attractive practices. His top buys are companies that have an open-ended growth and a proper niche. Most importantly he holds investments for more than five years. His funds in 2010 were valued at $18 billion.
Here are Ron Baron's top yields:
85% of Corporate Office Properties Trust (OFC)'s business is property. The properties are owned mainly in suburban areas such as Washington, D.C., and Baltimore. Sixty percent of its income comes from the U.S. government, defense IT contractors and data firms.
There have been some negative reports submitted by suburban office landlords on the deleterious effects in third-quarter results due to the weak macro environment on this business; however, there is stabilization of the leasing environment within the suburban office markets.
Why did Ron Baron invest in the company? Despite the above-mentioned headwinds, OFC has increased dividends steadily since its 2006 IPO and announced another $0.4125 quarterly dividend. Furthermore, stocks yield at 4.9%. Due to the defense spending cuts and its subsequent subcontracting of private companies, Corporate Office Properties Trust may make good profit of its position.
PAA Natural Gas Storage LP (PNG) is a limited liability company. Its main operations are the acquisition, development, operation and commercial management of natural gas storage facilities. Louisiana and Michigan harbor its two natural gas storage facilities.
Back on September 22, PAA Natural Gas Storage LP’s vice chairman, Harry N. Pefanis, invested $169,381.00 into 10,000 shares of PNG, for a cost per share of $16.94. This type of insider buy particularly calls the attention of bargain hunters because this type of purchase is made by insiders that expect to make money.
Ron Baron saw PNG as an interesting pick because it pays an annualized dividend of $1.43 per share that is distributed on a quarterly basis and the annual yield is 8.4%. Most importantly, the anticipated EPS growth rate is 11.4%.
National CineMedia (NCMI) develops, produces and distributes an entertainment and advertising program, FirstLook, which is played at movie theaters. Some of its customers are national, regional and local advertisers. With its digital network, NCMI also operates with corporate events distributing concerts, sporting and entertaining events and the like.
Management reported $425 million-$435 million in revenue and $210 million-$220 million in adjusted EBITDA. Both revenue and EBITDA estimates suffered a drop from last year when they stood at $460 million-$470 million and $222.4 million, respectively. Management attributed this drop to the weak market, although it considers that this weakness is a short-term phenomenon. As regards national advertising, commitments are higher for the next fiscal year and 2012 is expected to increase theater advertising demand.
Financially speaking, NCMI reported a one-year fiscal operating profit margin of 44.58%. It has a market capitalization of $731 million and a beta of 0.42.
Movie theater complexes and entertainment-themed retail centers together with their adjacent lands are Entertainment Properties Trust (REIT)’s main real state investments.
Sixty-seven megaplex theaters in 24 states among other entertainment properties constitute REIT’s portfolio. These entertainment properties are located in Colorado and New York. In addition, EPR owns land parcels and related properties adjacent to several of its theater properties.
Entertainment Properties (EPR) reported total a revenue of $74.4 million in the second quarter 2011, which is better than the total revenue of $70.92 million in second quarter 2010. Its market cap is about $2.0 billion. It is trading at a P/E ratio of 21.0, while the current price is $38.07. Dividend yield is 7.04%, and P/B is 1.2, below the industry average of 2.2. All these elements encouraged Ron Baron to invest in it.
Chesapeake Lodging Trust (CHSP) is a self-advised hotel investment company that tries to profit from lodging investment opportunities. Some of Chesapeake Lodging Trust’s main targets are upscale hotels, airport, convention markets and premium select-service hotels in the U.S.
Chesapeake Lodging Trust has announced that it has completed the transaction of acquiring the 122-room Holiday Inn New York City Midtown with a value of $52.2 million and it has signed contract with Real Hospitality Group for the hotel’s management. The acquisition of the Holiday Inn was funded with a borrowing under Chesapeake's credit facility.
The year 2011 showed a decrease in the lodging-related field shares and poor performance; however, there are some factors that will help improve the lodging-related field and this may represent an important growth. Ron Baron decided to invest in this stock because the lodging industry is showing improving trends and the company expects to accelerate rate growth.
The annual dividend for every share is 80 cents which provides a yield of 6.8%. Its market cap is $513.60 million. Net insider shares purchased over the last six months at 604.0K, which is 2.10% of the company's $28.72 million share float.