Baron Funds, the asset management firm founded by Ron Baron (Trades, Portfolio), disclosed this week that its top five position boosts for the fourth quarter of 2019 were in GDS Holdings Ltd. (NASDAQ:GDS), Globant SA (NYSE:GLOB), Alibaba Group Holding Ltd. (NYSE:BABA), Kinsale Capital Group Inc. (NASDAQ:KNSL), Activision Blizzard Inc. (NASDAQ:ATVI) and Brookfield Asset Management Inc. (NYSE:BAM).
Baron co-manages the Asset Fund and manages the Growth and Partners Funds. The fund manager invests primarily in small and mid-size companies that have open-ended growth opportunities and defensible niches.
The fund applies bottom-up research with a value-oriented purchase discipline and mainly ignores short-term market fluctuations when the fundamental reasons for purchasing a company stays the same.
As of quarter-end, the $24.31 billion equity portfolio contains 350 stocks, of which 20 represent new holdings. The top three sectors in terms of weight are consumer cyclical, technology and financial services, with weights of 21.46%, 21.20% and 16.53%.
Baron Funds added 638,220 shares of GDS, increasing the stake 24.44% and the equity portfolio 0.13%. Shares averaged $45.02 during the quarter.
The Shanghai-based company operates data centers in China, offering collocation and managed solutions to information technology service providers. According to GuruFocus, GDS's financial strength ranks 4 out of 10: Although the company has a solid Piotroski F-score of 6, its debt ratios underperform over 90% of global competitors.
Chase Coleman (Trades, Portfolio)'s Tiger Global Management also has a holding in GDS.
Baron Funds added 283,401 shares of Globant, increasing the position 492.67% and the equity portfolio 0.12%. The stock averaged $99.91 per share during the quarter.
The Luxembourg-based software company develops platforms that incorporate various software products, mobile applications and sensors that assist its clients in knowing the end user's behavioral pattern. GuruFocus ranks Globant's profitability 8 out of 10 on several positive investing signs, which include expanding operating margins and a three-year revenue growth rate that outperforms 83.98% of global competitors.
Other gurus with holdings in Globant include Joel Greenblatt (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).
Baron Funds added 117,570 shares of Alibaba, increasing the holding 6.30% and the equity portfolio 0.10%. Shares averaged $188.59 each during the quarter.
GuruFocus ranks the Chinese retail giant's profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and a three-year revenue growth rate that outperforms over 96% of global competitors. Additionally, operating margins are outperforming 94.40% of global specialty retail companies despite contracting over the past five years.
David Tepper (Trades, Portfolio) also increased his holding of Alibaba during the quarter.
Baron Funds added 181,764 shares of Kinsale, increasing the position 11.42% and the equity portfolio 0.07%. Shares averaged $101.66 apiece during the quarter.
The Richmond, Virginia-based company offers property, casualty and specialty insurance products to construction, energy and environmental businesses. According to GuruFocus, Kinsale's debt ratios are outperforming over 86% of global competitors, suggesting good financial strength.
Baron Funds added 250,950 shares of Activision Blizzard, increasing the holding 104.59% and the equity portfolio 0.06%. Shares averaged $55.44 during the quarter.
GuruFocus ranks the Santa Monica-based gaming company's profitability 9 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank, a Joel Greenblatt (Trades, Portfolio) return on capital that outperforms 91.98% of global competitors and operating margins that outperform 86.57% of global interactive media companies.
George Soros (Trades, Portfolio) and Andreas Halvorsen (Trades, Portfolio) also purchased shares of Activision Blizzard during the quarter.
Baron Funds added 296,554 shares of Brookfield, increasing the stake 24.37% and the equity portfolio 0.06%. Shares averaged $56 during the quarter.
The Toronto-based company owns and manages commercial property, power and infrastructure assets. GuruFocus ranks Brookfield's profitability 8 out of 10 driven on a high Piotroski F-score of 7 and a three-year revenue growth rate that outperforms 85.31% of global competitors.
Disclosure: No positions.
Read more here:
- Michael Burry's Scion Asset Management Buys 5 Stocks in the 4th Quarter
- Mario Gabelli's Top 5 Buys of the 4th Quarter
- Leon Cooperman's Top 6 Buys for the 4th Quarter
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This article first appeared on GuruFocus.