Shares of Gartner, Inc. (NYSE:IT), a provider of syndicated IT research, contributed to fourth quarter performance. We believe that Gartner’s key forward-looking metrics continue to be solid. We expect to see continued acceleration due to easing comparisons, growing productivity, and sales tactics that have been fine-tuned to match current macro conditions. Neal Rosenberg’s first draft of this write-up concluded: “We believe that the company has significant financial flexibility, and will begin to deploy capital more aggressively on share repurchases or M&A.” Neal was prescient. On January 5, Gartner announced the acquisition of CEB Inc., whose primary asset is the Corporate Executive Board business, in a cash and stock transaction valued at approximately $3.3 billion (about 70% cash and 30% Gartner stock). Gartner’s management team believes the deal will be immediately accretive to Gartner’s adjusted earnings for 2017, double-digit percent accretive to adjusted earnings for 2018, and enable Gartner to further expand its services beyond the IT function. (Neal Rosenberg)
From Baron Funds' Baron Opportunity Fund fourth quarter 2016 commentary.
