Baron Opportunity Fund (BIOIX)

Portfolio Management

MichaelLippert
Michael Lippert

Fund Manager since 2006

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Fund Description

Baron Opportunity Fund invests in innovative high-growth companies.

    

  

Fund Resources

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Michael Lippert discusses how he invests in innovative companies

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Latest Fact Sheets

Standard Fact Sheet

Expanded Fact Sheet - Institutional Shares

Portfolio Commentary

Institutional 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)
  • Netflix, Inc. is the leading global on-demand video service with over 50 million subscribers. Shares of Netflix were up sharply in Q2 based on strong Q1 subscriber additions and a robust subscriber growth outlook for Q2. The company is accelerating its efforts to grow internationally while also investing aggressively in original content. While quarterly fluctuations in net additions will likely continue, we believe Netflix is capable of ultimately achieving 50 million subscribers domestically and over 100 million subscribers abroad.

  • 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.

  • Shares of Benefitfocus, Inc., a leading provider of cloud-based benefits software, contributed to performance. The company generated robust Q1 results and announced a reseller agreement with SAP, which we believe will be an important long-term accelerant to sales. The stock’s multiple has been expanding since February, when the company received a strategic investment from private exchange operator Mercer. We believe Benefitfocus serves an addressable market more than 100 times larger than its current business.

Detractors (for quarter ended 6/30/2015)
  • Aerie Pharmaceuticals, Inc. is developing a glaucoma medication called Rhopressa. In Q2, Aerie reported results from the first of two pivotal Phase 3 trials. While various data cuts showed potential and the drug inarguably lowered pressure, the primary endpoint of non-inferiority to Timolol was not met, and shares fell sharply. We exited our position.

  • The Spectranetics Corporation is a medical device company that specializes in equipment that clears plaque from cardiac and peripheral (arm and leg) arteries. After the company reported that it had missed revenues in Q1 and lowered full year guidance, shares fell. We believe the market misunderstood certain dynamics, and based on our conversations with management and industry experts, bought more near the bottom.

  • Shutterstock, Inc. is the leading online provider of royalty free stock photography. Shares were down in Q2 in the wake of Adobe’s launch of a rival stock photo product. We believe Shutterstock's localized marketplace dynamics and unique search capabilities differentiate it. Adobe has tried unsuccessfully to enter the stock photo market several times before. We think Shutterstock will gain market share in royalty-free images and accelerate its initiatives in music and video footage licensing, enterprise sales, and international expansion.

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