Baron Partners Fund (BPTRX)

Portfolio Management

Ron Baron

Fund Manager since 1992

View All Commentary by Ron

Fund Description

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



Portfolio Commentary

Retail Performance

Review and Outlook (for quarter ended 9/30/2016)

The Review and Outlook for period ending September 30, 2016 is not yet available

Top Contributors/Detractors to Performance

Contributors (for quarter ended 9/30/2016)
  • Shares of veterinary diagnostics leader IDEXX Laboratories, Inc. increased in Q3. The stock continued to rally on strong financial results and multiple expansion. Competitive trends are strong and improving, highlighted by instrument revenue growth, domestic lab growth, rising sales productivity, and stability in rapid assays. We believe that IDEXX’s direct go-to-market model coupled with research and development-driven product enhancements will put steady upward pressure on organic revenue and earnings growth over time.

  • Shares of brokerage business The Charles Schwab Corp. appreciated in Q3 on continued strong asset growth. The business continued to shift to fee-based advice from trading activity, a move that we believe creates more stability and the potential for increased profitability. Speculation of an interest rate hike by the U.S. Federal Reserve also helped boost the stock price as a rate increase would likely improve earnings for the company.

  • Shares of ski resort company Vail Resorts, Inc. increased in Q3 on news that the company had entered into an agreement to acquire Whistler Blackcomb in Canada. Vail owns some of the best ski resorts across North America, including Vail, Beaver Creek, Park City, and now Whistler. The deal gives the company even greater scale, which we think it will be able to leverage in its bid to continue to grow its season pass sales.

Detractors (for quarter ended 9/30/2016)
  • Shares of health care data and analytics vendor Inovalon Holdings, Inc. fell in Q3 on weak financial results and reduced guidance through year-end. Management attributed the revenue shortfall to price reductions in its retrospective risk adjustment business, and the margin shortfall to investments aimed at long-term growth. We think the recent poor performance is temporary. Inovalon has high quality products that generate solid ROI for its customers, and we think it is well-positioned to capitalize on the need for robust data and analytics in health care.

  • Shares of electric vehicle company Tesla Motors, Inc. fell during Q3 as the market continued to evaluate the potential merger with SolarCity. An investigation into a fatal accident involving Tesla’s autopilot and the possibility of an additional equity round by year end also pressured the stock. We feel good about the brand Tesla has built and its ability to bring substantial innovation to its products. Tesla has received over 370,000 Model 3 reservations, representing close to $18 billion in backlog and the largest product launch in history.

  • Zillow Group, Inc. is the leading online real estate company in the U.S. Shares fell in Q3 as investors paused prior to a new product roll out. While investors appear cautious about the near-term impact of this roll out, we expect that after a short transition period, the program will have a positive impact on revenue growth. Zillow continues to invest in its brand as the leader in an $8 billion real estate advertising market.  We believe that, as the leader of a highly fragmented market, Zillow remains well positioned to grow its share going forward.

Quarterly Attribution Analysis (for quarter ended 9/30/2016)

The Quarterly Attribution Analysis for period ending September 30, 2016 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.