This article is part of a series that provides an ongoing analysis of the changes made to BAMCO Inc.’s 13F stock portfolio on a quarterly basis. It is based on Ron Baron’s regulatory 13F Form filed on 05/19/2021. The 13F portfolio value increased marginally from $40.42B to $40.57B this quarter. The holdings are diversified with recent 13F reports showing around 375 positions. There are 50 securities that are significantly large (more than ~0.5% of the portfolio each) and they are the focus of this article. The largest five stakes are Tesla Motors, CoStar Group, IDEXX Labs, Vail Resorts, and Penn National Gaming. They add up to ~24% of the portfolio. Please visit our Tracking Ron Baron’s BAMCO Portfolio series to get an idea of their investment philosophy and our last update for the fund’s moves during Q4 2020.
Baron Capital currently has ~$50B under management. The assets are distributed among several mutual funds with the common theme of long-term research-driven growth investment solutions. Their flag ship mutual funds are Barron Asset Fund (MUTF:BARIX) incepted in 1987 and Baron Partners Fund (MUTF:BPTIX) incepted in 1992. Both funds have produced significant alpha over their lifetimes – 12.34% annualized for Baron Asset Fund compared to 10.93% for the Russell Midcap Growth and 16.36% annualized for Baron Partners Fund compared to 10.73% for the Russell Midcap Growth.
New Stakes:
TripAdvisor (TRIP): TRIP is a small 0.66% of the portfolio position established this quarter at prices between ~$28 and ~$61 and the stock currently trades at $40.30.
Stake Increases:
CoStar Group (CSGP): CSGP is a top three stake at ~4% of the portfolio. It is a very long-term position that has been in the portfolio for two decades. The stake was first purchased in 2000 and the position remained very small for the next three years. The bulk of the current position was built in the 2003-2004 timeframe at prices between ~$1.75 and ~$4.70. 2014 also saw a ~45% stake increase at prices between $14.20 and $21.20. Since then, the position had remained relatively steady although adjustments were made in most quarters. Recent activity follows: last two years saw a ~22% selling at prices between ~$29.50 and ~$94. The stock currently trades at $82.82. There was a marginal increase this quarter.
Note: Baron Capital owns ~5% of CoStar Group. The prices quoted above are adjusted for the 10-for-1 stock-split in June.
Vail Resorts (MTN): MTN is a top-five 3.23% very long-term stake. During their first 13F filing in Q1 1999, the position was already very large at 11.6M shares. That original stake was sold down by around two-thirds in the 2003-2004 timeframe at prices between ~$11.50 and ~$23. Since then, there has only been minor activity. Last two years saw a ~10% trimming. The stock currently trades at ~$317. This quarter saw a marginal increase.
Note: Baron Capital owns ~11% of Vail Resorts.
MSCI Inc. (MSCI): MSCI is a 2.31% of the portfolio position established in 2007. Next year saw the stake built to a ~9.9M share position at prices between ~$12.50 and ~$36. The 2012-2014 timeframe saw the position reduced by ~75% at prices between ~$26 and ~$50. Since then, the stake has remained relatively steady. Q1 2020 saw a ~5% stake increase while there was minor trimming over the next three quarters. The stock currently trades at ~$533. This quarter saw a marginal increase.
Arch Capital Group (ACGL): ACGL is a ~2% of the portfolio stake first purchased in 2007 at prices between ~$7 and ~$8.25. The position remained relatively steady over the next three years. 2011 saw a ~17% stake increase at prices between ~$9.50 and ~$12.50 and that was followed with a similar increase in 2018 at prices between ~$25.50 and ~$31. Since then, the activity has been minor. The stock is now at $38.94.
Note: Baron Capital owns ~5% of Arch Capital Group.
Zillow Group (Z): The 1.62% position in Zillow goes back to 2011 when they established a very small stake following Zillow’s IPO that July. Shares started trading at ~$34 per share. 2015 saw the position built to ~3.8M shares at prices between ~$23 and ~$125. The stake has wavered. Recent activity follows: 2019 saw a ~50% stake increase at prices between ~$29.50 and ~$50 while Q1 2020 saw a two-thirds reduction at prices between ~$25 and ~$65. Next quarter saw the position increased by ~240% at prices between ~$30 and ~$63. The stock currently trades at ~$122. Last three quarters have seen only minor adjustments.
Note: Baron Capital owns ~10% of Zillow Group.
Alibaba Group Holdings (BABA): BABA is a 1.29% of the portfolio position first purchased in 2014 at prices between ~$85 and ~$115 following their IPO in September 2014. The stake was built over the next three years at prices between ~$59 and ~$191. 2018 saw a ~27% selling at prices between ~$130 and ~$208 while next year there was a 75% increase at prices between ~$140 and ~$210. The stock currently trades at ~$227. Last few quarters have seen only minor adjustments.
Bright Horizons Family Solutions (BFAM): The 1.14% BFAM stake was established in 2013 at prices between ~$28 and ~$38. BFAM had an IPO in Jan 2013 and shares started trading at ~$28 per share. The position had seen consistent selling since 2015. The stake was reduced by ~55% in the period thru Q1 2020 at prices between ~$55 and ~$175. The stock currently trades at ~$147. There was a ~12% stake increase in Q2 2020. Last three quarters have seen only minor adjustments.
GDS Holdings (GDS): The ~1% GDS stake was established in 2018 and built at prices between ~$23 and ~$63. The stock is now at $78.49. There was ~9% stake increase in Q3 2020 while this quarter saw a similar increase.
Taiwan Semiconductor (TSM): A very small position in TSM was established in 2013 at prices between ~$16 and ~$20. Since then, every year had seen consistent buying. Recent activity follows: 2018 saw a ~30% stake increase at prices between ~$35 and ~$46 and that was followed with a ~12% further increase last year at prices between ~$35 and ~$59. There was a ~25% reduction over the last three quarters at prices between ~$44 and ~$86. The stock currently trades at ~$120 and the stake is at 0.86% of the portfolio. Last two quarters have seen marginal increases.
Kinsale Capital (KNSL): KNSL is a 0.80% of the portfolio stake. A very small position was established in 2016 following Kinsale’s IPO. Most of the current position was built next year at prices between ~$28 and ~$45. The six quarters thru Q2 2020 had seen a ~30% stake increase at prices between ~$58 and ~$157. The stock currently trades at ~$165. There was a minor ~5% increase this quarter.
Note: Baron Capital owns ~8.5% of Kinsale Capital.
Amazon (AMZN) and RingCentral (RNG): These very small stakes saw significant buying last quarter. The 0.67% AMZN stake was increased by ~18% at prices between ~$3005 and ~$3445 and the stock currently trades at ~$3440. RNG is a 0.55% of the portfolio stake that was increased by roughly one-third at prices between ~$257 and ~$403. It currently trades at ~$291. Both positions were marginally increased this quarter.
Ceridian HCM Holding (CDAY): The 0.62% CDAY stake was established in Q2 2018. CDAY had an IPO in April 2018 and shares started trading at ~$34 per share. The position has since been increased by ~85% through consistent buying every quarter. The stock currently trades at $95.92.
Alexandria Real Estate (ARE): ARE is a 0.52% of the portfolio stake established in 2009 at prices between ~$32 and ~$64. The sizing had remained relatively steady over the last decade. 2019 saw a ~25% stake increase at prices between ~$113 and ~$162. The stock currently trades at ~$182. Last five quarters saw a marginal increase.
Alphabet Inc. (GOOG) (GOOGL), Bio-Techne Corp (TECH), Douglas Emmett (DEI), Installed Building Products (IBP), Manchester United (MANU), Red Rock Resorts (RRR), and Veeva Systems (VEEV): These small (less than ~1.5% of the portfolio each) stakes saw increases this quarter.
Note: Baron Capital owns significant ownership stakes in the following businesses: Installed Building Products, Manchester United, and Red Rock Resorts.
Stake Decreases:
Tesla Inc. (TSLA): TSLA was a minutely small stake first purchased in 2012. The current position was built from 2014 at an average cost of ~$44 per share. The stock currently trades at ~$680 and is now the largest 13F position at ~10% of the portfolio. Last three quarters have seen a ~25% selling at prices between ~$445 and ~$883.
Note 1: In early December, Baron Funds released an FAQ detailing this position. Their overall cost-basis is $45 per share. They sold 745K shares in September at $445 per share on average and 308K shares in early December at $638 per share on average. They did this for portfolio management reasons but are still very bullish on Tesla. They expect Tesla’s share price to reach $2K per share by 2030.
Note 2: The prices quoted above are adjusted for the 5-for-1 stock split last August.
IDEXX Labs (IDXX): IDXX is a top three 3.51% of the portfolio first purchased in 2005. The next three years saw a large stake build-up at prices between ~$15 and ~$30. Since then, the position has remained relatively steady although adjustments were made every quarter. Last two years have seen a ~30% trimming. The stock currently trades at ~$632.
Penn National Gaming (PENN): PENN is a 2.92% of the portfolio stake that has been in the portfolio since 2005. Recent activity follows: the two years through Q2 2020 saw a ~50% stake increase at prices between ~$4.50 and ~$74. The stock is currently at $76.49. There was minor trimming in the last three quarters.
Note: Baron Capital owns ~7% of Penn National Gaming.
Gartner Inc. (IT): IT is a 2.55% of the portfolio position first purchased in 2007 at prices between ~$16 and ~$28. The next three years saw consistent buying as the original position was increased by ~50% at prices between ~$9 and ~$28. The 2014-2015 timeframe saw a ~22% reduction at prices between ~$66 and ~$93. Recent activity follows: the seven quarters through Q3 2020 saw a ~20% selling at prices between ~$83 and ~$171. The stock currently trades at ~$242. Last two quarters have seen only minor adjustments.
Note: Baron Capital owns ~6% of Gartner Inc.
FactSet Research (FDS): FDS is a ~2% long-term stake first purchased in 2006. The next two years saw a 4.7M share stake built at prices between $34 and $69. The position has since been reduced thru minor selling almost every quarter. The stake is now at ~2.7M shares and the stock is at ~$336. They are harvesting gains. Last three quarters saw marginal trimming.
Note: Baron Capital owns ~7% of FactSet Research.
ANSYS Inc. (ANSS): The bulk of the 1.86% ANSS position was purchased in 2009 at prices between ~$20 and ~$43. The stake was increased by ~15% over the next two years but was reduced since. The four years thru 2018 saw a ~25% selling at prices between ~$143 and ~$190. Last two years had seen a ~10% trimming. The stock currently trades at ~$347. This quarter also saw a ~3% trimming.
Guidewire Software (GWRE): The 1.43% GWRE position was purchased in the 2012-2013 timeframe at prices between ~$20 and ~$49. Guidewire had an IPO in January 2012. 2017 also saw a ~25% stake increase at prices between ~$51 and ~$83. Since then, the activity has been minor. The stock currently trades at ~$113.
Note: Baron Capital owns ~7% of Guidewire Software.
Iridium Communications (IRDM): IRDM is a 1.28% of the portfolio position first purchased in 2014 at prices between ~$6 and ~$10. The position had remained relatively steady since. H1 2019 saw a one-third stake increase at prices between ~$18.50 and ~$28 and that was followed with minor increases over the next two quarters. The stock currently trades at ~$40. Last few quarters have seen minor trimming.
Note: Baron Capital owns ~9% of Iridium Communications.
Choice Hotels (CHH): CHH was already a huge 19.4M share position in their first 13F filing in Q1 1999. That original stake was reduced by ~90% to a ~1.9M share stake by 2004 at prices between ~$3 and $22. 2007 saw a ~70% stake increase at prices between ~$26.50 and ~$34. Since then the position was relatively steady till 2014. The five years thru 2019 had seen minor trimming most quarters – overall, there was a ~15% selling during that period at prices between ~$42 and ~$105. The stock currently trades at ~$119. Last three quarters saw marginal trimming.
Note: Baron Capital owns ~8.5% of Choice Hotels.
Mettler Toledo International (MTD): MTD is a 1.14% of the portfolio position established in 2008 at prices between ~$68 and ~$110. Next year saw a ~150% stake increase at prices between ~$47 and ~$100. Since 2009, the position has seen consistent selling: ~85% reduction at prices between ~$100 and ~$1335. The stock is now at ~$1385. They are harvesting long-term gains.
Marriott Vacations Worldwide (VAC): VAC is a 1.11% portfolio position. A minutely small stake was purchased in 2012 and the following two years saw the position built to a ~2M share position at prices between ~$42 and ~$75. 2018 also saw a ~50% increase at prices between ~$62.50 and ~$152. The stock is now at ~$159. Last four quarters have seen a ~15% trimming.
Note: Baron Capital owns ~6% of Marriott Vacations Worldwide.
Hyatt Hotels (H): The ~1% Hyatt stake was established in the high-20s price range in 2009 following their IPO that November. The next five years saw the position almost doubled at prices between ~$29 and ~$64. 2016 saw a ~30% selling at prices between ~$37 and ~$58. Since then, the stake has remained relatively steady although adjustments were made every quarter. The stock currently trades at $77.64. The three quarters through Q3 2020 had seen a minor increase while last two quarters saw a minor reduction.
Note: Baron Capital owns ~13% of Hyatt Hotels.
Gaming and Leisure Properties (GLPI): The 0.92% GLPI stake was established in 2013 because of its spin-off from Penn National Gaming. 2016 saw the stake increased by ~30% at prices between ~$25.50 and ~$36 while next year saw a similar reduction at prices between ~$30 and ~$39. The five quarters thru Q1 2020 had also seen a ~14% trimming. The stock currently trades at $46.33. Last three quarters saw marginal trimming.
Charles Schwab (SCHW), Endava plc (DAVA), Illumina Inc. (ILMN), Morningstar Inc. (MORN), Primerica Inc. (PRI), SBA Communications (SBAC), SS&C Technologies (SSNC), SiteOne Landscape Supply (SITE), The Trade Desk (TTD), Trex Company (TREX), Verisk Analytics (VRSK), West Pharma (WST), Wix.com (WIX), Zai Lab (ZLAB), and ZoomInfo Technologies (ZI): These small (less than ~1.5% of the portfolio each) stakes were reduced during the quarter.
Note 1: Baron Capital owns significant ownership stakes in the following businesses: Primerica, Endava plc, and ZoomInfo Technologies.
Note 2: Although the positions as a percentage of the portfolio are very small, Baron Capital has significant ownership stakes in the following businesses: Altair Engineering (ALTR), BRP Group (BRP), Cohen & Steers Inc. (CNS), Grid Dynamics (GDYN), Repay Holdings (RPAY), and Sarissa Capital Acquisition (SRSA).
The spreadsheet below highlights changes to Ron Barron’s US stock holdings in Q1 2021:
Source: John Vincent. Data constructed from Ron Baron’s 13F filings for Q4 2020 and Q1 2021.
