From Baron Funds' second quarter commentary:
We added to our position in Choice Hotels International, Inc. (CHH, Financial), the largest franchisor of hotels in the U.S. The company announced that it would pay a one-time, $600 million, $10 per share, special dividend to its shareholders. This "leveraged recapitalization" was enabled by the consistent earnings growth of Choice's franchise revenues and unusually attractive financing terms currently available. We regard this favorably since we think the company will be able to increase its earnings and reduce its indebtedness sufficiently during the next year to remain investment grade.We think the announcement also shows the company's confidence in its business and continued propensity to return capital to its shareholders.We believe the company has additional opportunities to accelerate its growth with new business opportunities that could create value for its shareholders. We continue to find the company's ability to earn money in both lodging
We added to our position in Choice Hotels International, Inc. (CHH, Financial), the largest franchisor of hotels in the U.S. The company announced that it would pay a one-time, $600 million, $10 per share, special dividend to its shareholders. This "leveraged recapitalization" was enabled by the consistent earnings growth of Choice's franchise revenues and unusually attractive financing terms currently available. We regard this favorably since we think the company will be able to increase its earnings and reduce its indebtedness sufficiently during the next year to remain investment grade.We think the announcement also shows the company's confidence in its business and continued propensity to return capital to its shareholders.We believe the company has additional opportunities to accelerate its growth with new business opportunities that could create value for its shareholders. We continue to find the company's ability to earn money in both lodging
