Guru Ron Baron (Trades, Portfolio) founded Baron Capital in 1982, which currently owns 313 stocks with a total valuation of $21.591 billion.
In the first quarter of 2016, Baron sold out 12,971,289 shares of ITC Holdings Corp. (ITC, Financial).
ITC Holdings was incorporated in 2002 in Michigan for the purpose of acquiring ITC Transmission. The company invests in the electricity transmission grid to improve reliability, expand access to markets, lower the costs of delivered energy and allow new generating resources to interconnect to its transmission systems.Ă‚
ITC Holdings has a market cap of 6.49, a P/E ratio of 27.41 billion and an enterprise value of $10.93 billion.
According to GuruFocus, ITC Holdings has a 6/10 Financial Strength rating with an equity to asset ratio of 0.23, ranking it lower than 78% in the Global Utilities Regulated Electric industry. GuruFocus has also given ITC Holdings one severe warning sign, which is the asset growth is faster than revenue growth.
Baron has decided to cross off ITC Holdings from his portfolio in the first quarter of 2016. Baron may have decided to sell out out this holding for the following reasons:
- The company has issued $1.3 billion of new debt over the previous three years.
- The company has negative earnings power according to GuruFocus.
- The company’s quick ratio is at 0.20, ranking it beneath 99% of the companies in the industry.
Cheers to your investment success.
Disclaimer: Author does not own any stocks mentioned.
