Ron Baron (Trades, Portfolio) founded Baron Capital in 1982, a firm dedicated to long-term investing. Through intensive research, the firm aims to develop industry expertise, and seeks companies with managements who have integrity and long-term vision.
Baron is the co-portfolio manager of the Baron Asset Fund, as well as the portfolio manager of the Growth and Partners funds. The following chart shows the returns of the Partners Fund in relation to the S&P 500.
During the fourth quarter, Baron purchased 29 new stocks with a quarter-over-quarter turnover of just 3%. The following are the top five new holdings in order of portfolio impact.
Hilton Worldwide Holdings (HLT, Financial)
Baron purchased 1,861,002 shares of Hilton Worldwide, which traded for an average price of $25.01 during the quarter. The company has a 0.19% portfolio weighting.
Hilton Worldwide owns, leases, or franchises approximately 4,073 hotel and resort properties. The company launched its IPO in December 2013, raising more than $2 billion.
Over the past year, the stock has been up 33% and currently trades at $28.61.
Diluted EPS was $0.68 in FY 2014, which has increased every year since 2012.
The current P/E ratio is 51 and the P/S ratio is 2.7.
Shell Midstream Partners (SHLX, Financial)
Baron also purchased 832,789 of Shell Midstream for an average price of $35.55 per share. The company now accounts for 0.14% of the portfolio.
The company is engaged in the transportation of crude oil by pipeline, and develops and acquires pipelines and other midstream assets.
Shell Midstream is a limited partnership that was formed by Royal Dutch Shell (RDS.A) (RDS.B) and launched its IPO in October, raising $920 million.
The stock has increased 23% since then and currently trades at $41.33 with a P/S ratio of 38.6.
Dominion Midstream Partners (DM, Financial)
Baron bought 681,711 shares of Dominion Midstream, which traded for an average price of $32.33 during the quarter.
The company owns liquefied natural gas import, storage, regasification, and transportation assets.
Dominion also launched its IPO in October, pricing its shares at $21. Since then, the stock has risen almost 50% and currently trades at $39.32 with a P/S ratio of 8.
PRA Health Sciences (PRAH, Financial)
Baron bought 1,184,473 shares of PRA Health Sciences for an average price of $22.59. The company has a 0.11% portfolio weighting.
PRA is in the contract research organization industry, which runs trials on experimental drugs for pharmaceutical companies. The IPO debuted in November and raised about $330 million.
Since then, the stock has been up 44% and currently trades at $28.19. The company has been operating at a loss since FY 2012.
Cantel Medical Corp (CMN, Financial)
The fifth largest purchase during the quarter was 605,100 shares in Cantel Medical for an average price of $40.91 per share. The holding accounts for 0.1% of the portfolio.
Cantel Medical provides infection prevention and control products in the healthcare market.
The stock has been up 40% over the past year and may be overvalued according to the Peter Lynch chart.
GuruFocus rates its business predictability as a perfect 5-stars due to the consistent revenue and earnings growth. Diluted EPS was $1.04 in FY 2014 and has consistently increased over time.
The stock currently trades at $45.11 with a P/E ratio of 43.4 and P/S ratio of 3.6.
View Ron Baron (Trades, Portfolio)’s latest stock picks here. Not a Premium Member of GuruFocus? Try it free for 7 days.
