Baron Opportunity Fund (BIOIX)

Portfolio Management

MichaelLippert
Michael Lippert

Fund Manager since 2006

View All Commentary by Michael

Fund Description

Baron Opportunity Fund invests in innovative high-growth companies.

    

  

Fund Resources

side column img example
Michael Lippert discusses how he invests in innovative companies

Watch Now

Latest Fact Sheets

Standard Fact Sheet

Expanded Fact Sheet - Institutional Shares

4Q15 Quarterly Letter

 

Updates
Illumina Update

Portfolio Commentary

Institutional Performance

Review and Outlook (for quarter ended 12/31/2015)

The Review and Outlook for period ending December 31, 2015 is not yet available

Top Contributors/Detractors to Performance

Contributors (for quarter ended 12/31/2015)
  • Shares of Amazon.com, Inc. rose on strong Q4 results. Enhanced financial disclosures demonstrated that Amazon Web Services (AWS) was more profitable than investors anticipated. Rapid growth in the retail and AWS businesses boosted confidence in the company’s growth plans. With e-commerce comprising just 10% of global retail sales, we believe the shift to online retailing represents a multi-year growth opportunity. We also believe that, over time, the nascent AWS cloud computing opportunity will account for the majority of Amazon’s value.

  • Google Inc.’s new corporate name is now Alphabet Inc. With the change, the company instituted a new holdco structure that gives management more direct oversight over its newer businesses such as Google Fiber and Calico. Alphabet's shares rose on the strength of Q4 results that exceeded Street expectations. We believe that even while desktop search becomes more mature business for the company, the company is well positioned to benefit from substantial growth in mobile and online video advertising.

  • Shares of property and casualty insurance software vendor Guidewire Software, Inc. rose in Q4. Guidewire is the gold standard of P&C core systems vendors, as evidenced by near-perfect retention rates, growing installed base, and accelerating adoption of its complete product suite. The company is in the early innings of a core system replacement cycle, and is dramatically expanding its addressable market through persistent innovation. We believe recent deals with six Tier 1 vendors represent a tipping point in demand.

Detractors (for quarter ended 12/31/2015)
  • Shares of cybersecurity company FireEye, Inc. fell on reports of a disappointing Q3 and reduced Q4 financial expectations. Several executive departures also led to selling pressure. FireEye is shifting its focus from incident driven sales to a more holistic risk mitigation approach that we believe will help stabilize results. We believe the trend of increasing cyberattack activity, despite ebbs and flows, is here to stay and that FireEye will be a beneficiary. We think FireEye also enjoys a lead over competition through its incident response service.

  • Golar LNG Ltd. is a liquefied natural gas (LNG) shipping, regasification and liquefaction company. During 2015, Golar worked on a gas liquefaction project in Cameroon. While we think this project represents a great long-term investment opportunity, declining oil prices made LNG less attractive. In addition, LNG carriers have been trading at day rates that do not cover operational expenses. As a result, Golar’s stock price fell. Long term, we think progress in floating LNG projects and focus around midstream rather than shipping will create value.

  • Shares of Cepheid, a provider of equipment for molecular diagnostic tests, were down in Q4. The company took down full year 2015 guidance by about 1% (excluding the effects of foreign currency), and took down longer term operating margin guidance in 2016 and 2017. Given these moves, we sold the position. While we believe the company’s technology and reach of its products is unique, we are also mindful that it could take another year to empirically assess the ultimate success of the expansion strategy.

Quarterly Attribution Analysis (for quarter ended 12/31/2015)

The Quarterly Attribution Analysis for period ending December 31, 2015 is not yet available

Yearly Attribution Analysis (for year ended 12/31/2015)

The Yearly Attribution Analysis for period ending December 31, 2015 is not yet available

Back to Top

Invest In Baron Funds Today

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