The Fund added to its investment in Inovalon Holdings, Inc. (INOV, Financial), a health care data and analytics company. The foundation of the company is a proprietary data set which contains more than 9.2 billion medical events from 120 million unique patients. This data is used to power Inovalon’s advanced analytics, which help insurers identify gaps in care, quality, data integrity and financial performance. Clients leverage Inovalon’s intervention platforms to drive improvement in clinical and quality outcomes, utilization, and financial performance across the health care landscape. Inovalon serves a vast addressable market. The company addresses a $14 billion annual revenue opportunity, and we believe that logical adjacencies can increase the total addressable market by 3-4x. Secular drivers, particularly the need to reduce health care cost inflation and a shift to value based from consumption based health care, are helping to accelerate Inovalon’s growth. Finally, the company has an enviable financial model, with 98% client retention rates, high levels of recurring revenue, EBITDA margins that are approaching 40%, and strong free cash flow conversion. (Neal Rosenberg)
From Baron Funds' second quarter commentary.
