Baron Energy and Resources Fund (BENIX)
Portfolio Management
James H. Stone
Fund Manager since 2011
View All Commentary by JamesFund Description
Baron Energy and Resources Fund invests in securities of energy and resources companies and related companies of all sizes.
Fund Resources
Jamie Stone seeks long-term growth in energy and materials.
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Latest Fact Sheets
Expanded Fact Sheet - Retail Shares
Expanded Fact Sheet - Institutional Shares
Portfolio Commentary
Institutional PerformanceReview and Outlook (for quarter ended 3/31/2013)
This Fund does not have a Review and Outlook for period ending March 31, 2013
Top Contributors/Detractors to Performance
Contributors (for quarter ended 3/31/2013)
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Susser Petroleum Partners LP, a master limited partnership recently formed by Susser Holdings Co. to own and operate gas stations and gasoline distribution, outperformed in Q1. Susser went public in October 2012 at what we believed was a significant discount to the quality of its cash flow and growth potential. Since its IPO, the company has accelerated its growth plans, and we believe it will be able to significantly grow its cash flows and distributions through organic projects and acquisitions.
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Tesoro Logistics LP is a fee-based, growth-oriented publicly traded master limited partnership formed by Tesoro Corporation in 2011 to own, operate, develop, and acquire crude oil and refined products logistics assets. The company outperformed in Q1 as management continued to execute on growth projects such as buying a pipeline asset sold by Chevron and acquiring BP refining assets on the west coast. We continue to like Tesoro’s top-tier fee-based cash flow growth and supportive General Partner.
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Targa Resources Corp. outperformed in Q1. Targa is the general partner of Targa Resource Partners L.P. (LP) and is therefore the direct beneficiary of the LP’s distribution growth. We believe that Targa is uniquely positioned to benefit from hydrocarbons’ volume growth through its asset footprint, including pipeline and terminal systems, natural gas gathering and processing operations, and hard-to-replicate fractionators. In addition, we expect to see Targa’s cash flows become less commodity sensitive over time.
Detractors (for quarter ended 3/31/2013)
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Agrinos AS declined 46.3% in Q1. Agrinos is a green technology company with a unique microbial product that enhances crop yields. Performance in Q1 was weak because a delay in receivables collection led to a change in accounting policy, with no revenue booked for Mexico in Q4. We continue to hold Agrinos because we believe it has disruptive technology and exciting long-term growth prospects.
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Sandstorm Gold Ltd. is a finance company that invests in gold mines. The stock fell during Q1 due to an overall decline in gold equities and falling gold prices. Sandstorm Gold also provided lower-than-expected production guidance for 2013 and announced an investment that was poorly received by the market. We continue to own the stock because of its strong cash flow growth and large pipeline of potential investments.
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Shares of Polypore International, Inc. partially retreated from their Q4 run up of 31.5%. Although the lead-acid battery separator business (about 50% of revenues) did well in Q4, sales of separators for lithium-ion (LiON) batteries were lower than expected for both consumer and vehicle applications. We believe the revenue decline associated with LiON battery separators has troughed, and with its capacity expansion, the company should see significant upside earnings leverage as electric vehicles gain penetration.
Quarterly Attribution Analysis (for quarter ended 3/31/2013)
This Fund does not have a Quarterly Attribution Analysis for period ending March 31, 2013
Invest In Baron Funds TodayThe 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 judgement at the time of publication. Our views are not intended as recommendations or investment advise 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 Fund are subject to risk.
Source: FactSet PA.