Baron Asset Fund (BARIX)

Portfolio Management

Andrew Peck

Fund Manager since 2003

View All Commentary by Andrew

Fund Description

Baron Asset Fund invests primarily in mid-sized growth companies.


Portfolio Commentary

Institutional Performance

Review and Outlook (for quarter ended 9/30/2014)

The Review and Outlook for period ending September 30, 2014 is not yet available

Top Contributors/Detractors to Performance

Contributors (for quarter ended 9/30/2014)
  • Mobileye N.V. is a software and systems design leader for camera-based advanced driver assistance systems (ADAS). The share price increased after we participated in Mobileye's IPO in the quarter. We believe the company has the potential to become a multi-decade leader in the race to autonomous driving, a trend that we believe will improve transportation safety and efficiencies.

  • Shares of Vail Resorts, Inc., the largest ski resort operator in the U.S., increased in Q3 as the company resolved its litigation with the owners of Park City and bought the resort from them at what we believe is an attractive price. The resort gives Vail access to two adjacent resorts in Utah which, when combined, will make it the largest ski resort in the U.S. The company believes that by adding Park City to its season pass, it should be able to increase sales, which should help to insulate it from weather abnormalities.

  • Shares of wireless tower company SBA Communications Corp. rose in Q3 after the company reported strong Q2 results that showcased cash flow growth above consensus expectation. We have long believed that SBA’s U.S. contract structure, coupled with its commitment to invest abroad (especially in Brazil), will allow it to grow faster than its U.S. competitors. With all four major U.S. telecommunications companies building 4G networks, we believe strong cash flow growth should continue for SBA in both the U.S. and abroad.

Detractors (for quarter ended 9/30/2014)
  • Shares of industrial machinery company Colfax Corporation fell in the wake of weaker-than-expected Q2 results. Strong margins in welding were offset by operational missteps in the legacy fluid handling business combined with a weak macro environment. Colfax recently announced a new president for the fluid handling business, and we expect this business to get back on track soon. We believe that Colfax will continue to use its proven business strategy to improve operations at acquired companies, generating substantial shareholder value over time.

  • Shares of IDEXX Laboratories, Inc., the leader in veterinary diagnostics, declined in Q3 off all-time highs. IDEXX's fundamentals continue to improve, with organic growth in its core business reaching 10%. In July, management announced its intention to migrate its U.S. commercial operations from a hybrid to a direct sales model, which some investors used as an opportunity to take profits. We believe that this will prove to be a highly accretive change, as it will free up resources for IDEXX to grow its field sales force by 40% while also enhancing margins.

  • Shares of Illumina, Inc. declined in Q3. Illumina is the leading provider of next generation DNA sequencing instruments and consumables. There was no specific reason for the decline. The shares are up significantly over the past year, driven by strong momentum following the announcement of multiple new product introductions. We believe Illumina has further distanced itself from its competitors and holds an effective monopoly on DNA sequencing at a time when demand is accelerating, and our conviction in the long-term investment thesis remains unchanged.

Quarterly Attribution Analysis

This Fund does not have an Attribution Analysis for this time period.

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The prospective performance of the companies discussed herein is based on our internal analysis and reflect our opinions only. We cannot promise future returns and our opinions are a reflection of our best judgment at the time of publication. Our views are not intended as recommendations or investment advice to any person and are subject to change at any time based on market and other conditions and Baron has no obligation to update them.  Investing in the stock market is always risky. Current and future portfolio holdings in the Baron Funds are subject to risk.