Ron Baron (Trades, Portfolio) founded Baron Capital in 1982 to make his unique investment style available to institutional and individual investors. He manages a portfolio composed of 343 stocks with total value of $22,147 million, and the following are the most heavily weighted trades during the third quarter.
Baron reduced his stake in Brookdale Senior Living Inc. (BKD) by 62.80% and with an impact of 0.73% on the portfolio. The stake comprises 0.33% of his total assets.
The company is an operator of senior living communities in the U.S. with a total capacity of approximately 143 communities in 46 states and the ability to serve approximately 111,000 residents. The company operates independent living, assisted living and dementia-care communities and continuing care retirement centers.
During the third quarter, Brookdale reported a decrease of 1.2% for adjusted EBITDA compared to the second quarter of a year before, and same store revenue per occupied unit had a growth of 1.7% for the quarter. These results were in line with their expectations.
GuruFocus gives Brookdale a profitability and growth rating of 5 out of 10 with negative returns (ROE -13.98%, ROA -3.72%) that are underperforming 90% of the companies in the Global Long-Term Care Facilities industry. Financial strength has a rating of 6 out of 10, with a weak cash to debt of 0.01 that is below the industry median of 0.34.
Larry Robbins (Trades, Portfolio) is the main guru shareholder of the company with 9.55% of outstanding shares, followed by Jana Partners (Trades, Portfolio) with 5.55% and Third Avenue Management (Trades, Portfolio) with 3.18%.
Baron sold out his stake of Copart Inc. (CPRT) with an impact of 0.34% on the portfolio.
The company is a provider of online auctions and vehicle remarketing services. It provides vehicle sellers with services to process and sell vehicles mainly over the internet through its Virtual Bidding Second Generation Internet auction-style sales technology, which it refers to as VB2.
The company reported the third quarter with a decrease of 4.1% for revenue, a decrease of 3.7% for gross margin but an increase of 27.2% for net income.
The stock looks overpriced at the current price of $36.6. The DCF calculator gives a fair value of $27.32, estimating the stock is overvalued by 34%. GuruFocus gives Copart a profitability and growth rating of 9 out of 10 with good returns (ROE 21.07%, ROA 12.49%) that are outperforming 84% of companies in the Global Auto & Truck Dealerships industry. Financial strength has a rating of 6 out of 10, with a cash to debt of 0.71 that is slightly above the industry median of 0.64.
The company's main shareholder among the gurus is Chuck Royce (Trades, Portfolio) with a stake of 2.89% of outstanding shares, followed by Tom Gayner (Trades, Portfolio) with 0.8% and First Pacific Advisor with 0.57%.
Baron reduced his stake in Targa Resources Corp. (TRGP) by 55.19% with an impact of 0.34% on the portfolio. The stake comprises 0.18% of his total assets.
The company owns general and limited partner interests, including IDRs, in Targa Resources Partners LP, a Delaware limited partnership. It formed the partnership in October 2006 to own, operate, acquire and develop a portfolio of complementary midstream energy assets.
The stock looks overpriced at the current price of $42. The DCF calculator gives a fair value of $17.41, estimating the stock is highly overvalued by 142%. GuruFocus gives Targa Resources a profitability and growth rating of 3 out of 10 with weak returns (ROE 5.85%, ROA 0.53%) that are underperforming 74% of the companies in the Global Oil & Gas Midstream industry. Financial strength has a rating of 6 out of 10, with a cash to debt of 0.02 that is below the industry median of 0.05.
Leon Cooperman (Trades, Portfolio) is the main guru shareholder of the company with 3.49% of outstanding shares. Baron is second with a 1.41% stake, followed by Jim Simons (Trades, Portfolio) with 0.3%.
Baron reduced his stake in Colfax Corp. (CFX) by 35.62% with an impact of 0.23% on the portfolio. The stake is 0.31% of his total assets.
The company designs, manufactures, installs and maintains gas and fluid-handling products for use in a wide range of markets, including power generation, oil, gas and petrochemical, mining, marine (including defense) and general industrial.
During the third quarter, net sales declined 16.8% from the prior year and the company announced $50 million of additional cost reduction actions.
The stock looks overpriced at the current price of $26.52. The DCF calculator gives a fair value of $24.04, estimating the stock is overvalued by 10%. GuruFocus gives Colfax a profitability and growth rating of 8 out of 10 with easy returns (ROE 6.43%, ROA 2.85%) that are underperforming 55% of the companies in the Global Diversified Industrials industry. Financial strength has a rating of 7 out of 10, with a cash to debt of 0.14 that is below the industry median of 0.92.
The company's main shareholder among the gurus is Chuck Akre (Trades, Portfolio) with a stake of 5.66%, followed by Diamond Hill Capital (Trades, Portfolio) with 3.38% and Ron Baron (Trades, Portfolio) with 1.84% of outstanding shares.
He reduced his stake in Berry Plastics Group Inc. (BERY) by 38.89% with an impact of 0.22% on the portfolio.
The company is a provider of value-added plastic consumer packaging and engineered materials with a track record of delivering customized solutions to the customers. The company sells their solutions into consumer-oriented end-markets, such as food and beverage, healthcare and personal care.
In the third quarter, the company had strong cash generation in which cash flow from operations was $245 million, and operating EBITDA margins (17.1% of net sales) increased by more than 100 basis points year over year.
The stock looks overpriced at the current price of $36.83. The DCF calculator gives a fair value of $11.36, estimating the stock is highly overvalued by 224%. GuruFocus gives Berry Plastics a profitability and growth rating of 6 out of 10 with good returns. Financial strength has a rating of 6 out of 10, with a cash to debt of 0.03 that is below the industry median of 0.57.
Steven Cohen (Trades, Portfolio) is the main guru shareholder of the company with 2.68% of outstanding shares, followed by Ron Baron (Trades, Portfolio) with 2.3% and Pioneer Investments with 0.14%.
Baron bought 526,850 shares of Royal Caribbean Cruises Ltd. (RCL) with an impact of 0.21% on the portfolio. The stake is 0.21% of his total assets.
The company operates in the cruise vacation industry. The company owns Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisières de France and a 50% joint venture interest in TUI Cruises.
The stock looks overpriced at the current price of $94.35. The DCF calculator gives a fair value of $37.76, estimating the stock is highly overvalued by 150%. GuruFocus gives Royal Caribbean a profitability and growth rating of 7 out of 10 with good returns (ROE 6.79%, ROA 2.75%) that are outperforming 55% of the companies in the Global Leisure industry. Financial strength has a rating of 7 out of 10, with a cash to debt of 0.02 that is below the industry median of 0.75.
PRIMECAP Management (Trades, Portfolio) holds the largest number of outstanding shares of the company with a stake of 2.31%, followed by James Barrow (Trades, Portfolio) with 1.91% and John Rogers (Trades, Portfolio) with 0.43% of outstanding shares.
The investor sold out his stake in American Campus Communities Inc. (ACC) with an impact of 0.2% on the portfolio.
The company is a real estate investment trust (REIT). The company is the owner, manager and developer of high quality student housing properties in the U.S. in terms of beds owned, developed and under management.
The company had a strong third quarter in which the same store wholly-owned net operating income ("NOI") increased by 5.9% over the third quarter 2014.
The stock looks overpriced at the current price of $39.88. The DCF calculator gives a fair value of $15.05, estimating the stock is highly overvalued by 165%. GuruFocus gives American Campus a profitability and growth rating of 7 out of 10 with weak returns like ROE 4.20%, ROA 1.96% that are underperforming 67% of the companies in the Global REIT - Residential industry. Financial strength has a rating of 4 out of 10, with a cash to debt of 0.02 that is below the industry median of 0.05.
Jim Simons (Trades, Portfolio) is the main guru shareholder of the company with 0.48% of outstanding shares, followed by Chris Davis (Trades, Portfolio) with 0.42% and RS Investment Management (Trades, Portfolio) with 0.23%.
The investor reduced his stake in TerraForm Power Inc. (TERP) by 95.23% with an impact of 0.2% on the portfolio.
The company owns and operates contracted clean power generation assets.
GuruFocus gives TerraForm a profitability and growth rating of 4 out of 10 with negative returns (ROE -8.17%, ROA -4.19%) that are underperforming 70% of the companies in the Global Utilities - Independent Power Producers industry. Financial strength has a rating of 4 out of 10, with a cash to debt of 0.25 that is slightly above the industry median of 0.17.
The company's main shareholder among the gurus is Larry Robbins (Trades, Portfolio), who holds 0.91% of outstanding shares, followed by Steven Cohen (Trades, Portfolio) with 0.67% and Paul Tudor Jones (Trades, Portfolio) with 0.07% of outstanding shares
Baron also sold out his stake in Shutterstock Inc. (SSTK) with an impact of 0.2% on the portfolio.
Shutterstock operates a marketplace for commercial digital imagery. Commercial digital imagery consists of licensed photographs, illustrations and video clips that companies use in their visual communications, such as websites, digital and print marketing materials, corporate communications, books, publications and video content.
The stock looks overpriced at the current price of $34.25. The DCF calculator gives a fair value of $8.11, estimating the stock is highly overvalued by 322%. GuruFocus gives Shutterstock a profitability and growth rating of 5 out of 10 with weak returns (ROE 7.46%, ROA 4.75%) that are underperforming 58% of the companies in the Global Business Services industry. Financial strength has a rating of 9 out of 10, with no cash to debt.
Paul Tudor Jones (Trades, Portfolio) is the only guru shareholder of the company with 0.05% of outstanding shares.
Baron increased his stake in Summit Materials Inc. (SUM) by 144.51% with an impact of 0.18% on the portfolio. The stake is 0.3% of his total assets.
Summit is a heavy-side construction materials company. The company's materials include aggregates, which it supplies across the country, with a focus on Texas, Kansas, Kentucky, Missouri and Utah, and cement, which it supplies in Missouri, Iowa and Illinois.
GuruFocus gives Summit Materials a profitability and growth rating of 4 out of 10 with weak returns (ROE 4.54%, ROA -2.13%) that are underperforming 87% of the companies in the Global Building Materials industry. Financial strength has a rating of 6 out of 10, with a cash to debt of 0.02 that is below the industry median of 0.52.
Baron is the company's main guru shareholder with a stake of 3.44% of outstanding shares, followed by Steven Cohen (Trades, Portfolio) with 2.43% and Leon Cooperman (Trades, Portfolio) with 0.91%.
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