Baron Global Advantage Fund (BGAFX)
Portfolio Management
Alex Umansky
Fund Manager since 2012
View All Commentary by AlexFund Description
Baron Global Advantage Fund invests in growth companies of all sizes anywhere.
Portfolio Commentary
Retail 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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Google, Inc. is the largest search and online display advertising company in the world. Shares of Google were up 12% in Q1 based on improving sentiment around the company’s mobile opportunity, evidenced by improving Cost Per Click (CPC) trends and recognition that recently acquired Motorola Mobility’s impact on the overall business will be negligible. We believe the shift to mobile by consumers will ultimately be positive for Google, and the company will have the ability to lower its operating expenses.
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HomeAway, Inc. was up 47.7% in Q1. HomeAway is the #1 firm in online vacation rentals with over 700,000 paid listings. Performance in Q1 was due to strong Q4 results, where the company beat Street expectations and showed an acceleration in its revenue-per-listing metric.
Detractors (for quarter ended 3/31/2013)
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Velti plc is a leading global mobile marketing company. Shares of Velti declined sharply in Q1 due to the company missing Q4 expectations and reducing its 2013 outlook. While the company is focused on improving free cash flow generation in 2013, we believe it will take time before the company passes its low point on cash generation. Due to this lack of free cash flow visibility, we exited the position.
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Despite surpassing its own quarterly guidance, earnings results from Apple, Inc. disappointed investors. In particular, the company’s gross margins were pressured by some of its newer, lower-priced products (such as iPad minis), and its future revenue growth projections were muted. We believe the current share price does not reflect the market opportunity for Apple and the potential profitability of the business. We think there are many ways for Apple to generate strong shareholder returns.
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Rackspace Hosting, Inc. is a leading hosting and cloud computing service provider. This quarter Rackspace executed on building and transforming its cloud infrastructure to “Open Stack” which is an open source cloud orchestration project initiated by Rackspace and NASA. This transition impacted the core business growth and caused Rackspace to miss revenue expectations. Recent price cuts the company made left us with a cautious view of the competitive landscape and the sustainability of its business model and ROIC. As a result, we exited the position.
Quarterly Attribution Analysis (for quarter ended 3/31/2013)
This Fund does not have a Quarterly Attribution Analysis for period ending March 31, 2013
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