Baron Partners Fund (BPTRX)

Portfolio Management

RonBaron
Ron Baron

Fund Manager since 1992

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Fund Description

Baron Partners Fund invests in all-cap companies with significant growth opportunities.

   

   

Fund Resources

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Attribution Analysis 1Q15
Attribution Analysis 1Q15

Portfolio Commentary

Retail Performance

Review and Outlook (for quarter ended 6/30/2015)

The Review and Outlook for period ending June 30, 2015 is not yet available

Top Contributors/Detractors to Performance

Contributors (for quarter ended 6/30/2015)
  • Shares of electric vehicle company Tesla Motors, Inc. rose on an upbeat Q1 earnings call that included strong early results from the launch of Tesla Energy, its new commercial battery business. The early success of the entry level 70D model launch also helped boost share price. As a higher performing vehicle versus the lower-priced 60 model, which it replaced, we believe the 70D significantly expands Tesla's addressable market. We also look forward to Tesla’s upcoming launch of the Model-X SUV.

  • Illumina, Inc. is the leading provider of next generation DNA sequencing instruments and consumables. Shares rose on reports of better-than-expected revenue and earnings driven by strong sales of sequencing instruments. We maintain conviction because we believe Illumina holds a monopoly on DNA sequencing at a time when DNA sequencing is increasingly being used in cancer research and diagnosis and reproductive health.

  • Arch Capital Group Ltd. is a specialty insurance and reinsurance company based in Bermuda. The company reported solid Q1 financial results with 15% growth in book value per share. Despite a soft reinsurance pricing environment, underwriting profitability remains strong, catastrophe losses remain benign, and the company continues to experience favorable reserve development. The share price has also benefited from M&A activity and speculation in the P&C insurance industry.

Detractors (for quarter ended 6/30/2015)
  • Shares of ITC Holdings Corp., the nation’s largest independent transmission company, fell in Q2 along with most of the utility sector over interest rate concerns. Company-specific issues, including a potential regulatory cut to the allowed return on equity and questions around ITC’s ability to execute on the development portion of its five-year capital expenditure plan, also weighed on the stock. We continue to hold the stock as we believe ITC has robust growth prospects and will execute on its growth strategy and capital expenditure plan.

  • After several quarters of strong performance, shares of veterinary diagnostics leader IDEXX Laboratories, Inc. fell in Q2. We attribute a portion of the stock’s decline to greater-than-expected foreign exchange headwinds. Separately, the company noted increased competition and lower prices, impacting around 3% of revenue. We believe management will respond successfully with pricing programs, creative diagnostic bundles, and an expanded inside sales force to better serve its customers.

  • Shares of Dick’s Sporting Goods, Inc., the largest sporting goods retailer in the U.S., fell in Q2. Growth in same stores sales was dragged down by the golf segment, a trend many had expected to reverse. We believe any turnaround in the golf business will be a huge help in improving the business and stock price. The segment has already improved its inventory positioning and lowered the amount of discounting, which we think is a move in the right direction. Other segments remain strong, and we retain conviction in Dick’s long-term prospects.

Quarterly Attribution Analysis (for quarter ended 6/30/2015)

The Quarterly Attribution Analysis for period ending June 30, 2015 is not yet available

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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 judgement 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 Fund are subject to risk.

Source: FactSet PA.