From Baron Funds' first quarter letter: Capital Senior Living Corp. (CSU) remains one of our largest holdings. The company is a small capitalization operator of senior housing communities that has continued to benefit by acquiring "mom and pop" senior housing operators (1-5 properties) that fall below the radar of the larger senior housing companies and REITs. Recent acquisitions have been both accretive to earnings and generated significant cash flow growth. Acquisition prospects are also promising.We believe the company has the financial and operational capacity to acquire close to $200 million of senior housing operators versus its current market capitalization of approximately $250 million. We expect the company to also benefit from continued gains in occupancy and rental rates. We believe the shares are attractively valued and the company is an appealing acquisition target for larger senior housing operators, healthcare REITs, or private equity firms.
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