Four stocks highlighted at the Baron Investment Conference in New York City gave a glimpse of the growth that lies ahead for companies that are tapping technology to serve their customers.
The four stocks highlighted at the Baron Investment Conference stand out from their competitors in ways that could allow for accelerated growth and strong performance. Baron includes all four holdings in its mutual funds that are focused on long-term investing.
Ron Baron, founder, chief executive officer and portfolio manager at Baron Capital, told the roughly 5,000 attendees at his company’s 30th annual investment conference that the key to financial success is the strategic ownership of assets likes businesses, real estate, art and intellectual property that appreciate rapidly in value for the long haul. In a world focused on short-term results and news, most people overlook the power of acquiring and holding valuable assets, he added.
Paul Dykewicz meets with Ron Baron in New York.
Four Stocks Highlighted at the Baron Investment Conference: FactSet
Philip Snow, chief executive officer of Norwalk, Connecticut-based FactSet Research Systems Inc. (NYSE; FDS), has led his company since 2015 on its mission of creating open, flexible data and software solutions for investment professionals worldwide. FactSet seeks to provide instant access to financial data and analytics that investors use to make important decisions.
The company has amassed 190,000 global users, 8,000 client institutions and 12,000 employees worldwide. FactSet was founded 45 years ago during the dawn of the technological revolution. In those early days, bicycle messengers delivered its reports, such as a four-page company analysis.
The company’s Universal Screening toll can help clients find stocks through screening processes. In his presentation, Snow said a user could screen for a company in the S&P 500 that had grown revenue every year for the past 27 years, increased its annual dividend each year for the past 24 years and achieved 24 years of consecutive earnings per share (EPS) growth. He concluded by telling attendees the only stock that met that exacting criteria is FactSet.
Chart courtesy of www.stockcharts.com
Four Stocks Highlighted at the Baron Investment Conference: KNSL
Kinsale Capital Group (NYSE: KNSL), of Richmond, Virginia, is a specialty insurance company focused using technology to provide excess and surplus lines (E&S) coverage in the United States. Founded in 2009, Kinsale Capital Group is expanding largely by using its underwriting expertise to write coverages for hard-to-place small and mid-sized business risks.
The company’s mission is to deliver long-term value for its stockholders by generating exceptional, consistent financial growth. It aims to produce reliable and attractive underwriting profits and steady investment returns, as well as manage its capital prudently.
Kinsale Capital Group’s founder and chief executive officer Michael P. Kehoe told attendees his company is both entrepreneurial and highly efficient, leveraging its proprietary technology platform and the expertise of its employees.
Richmond, Virginia-based Kinsale Capital Group Inc. (NYSE: KNSL) has grown rapidly since starting operations in March 2010 as an underwriter of specialty commercial insurance in 50 states and the District of Columbia. The company has an A (Excellent) rating from the AM BEST Company.
Despite its role in the insurance industry, the company has used technology and recently artificial intelligence to differentiate itself from competitors. The result is strong profit margins and growth, Kehoe told attendees of the Baron Investment Conference.
Kinsale Capital Group Inc. was only one of the four companies that pays a dividend among the four whose CEOs spoke at the Baron event. The company offers a modest 0.16% dividend yield that could grow in the future along with the business.
Chart Courtesy of www.stockcharts.com
Four Stocks Highlighted at the Baron Investment Conference: WST
Eric M. Green, chairman, president and chief executive officer of West Pharmaceutical Services Inc. (NYSE: WST), of Scottsdale, Arizona, described the injectable medicine company he leads as serving one of the fastest growing sectors in the health care industry. The company is positioned well with scale, quality and technology to be the market leader, Green said.
“Clearly, we have a very strong position,” Green continued.
West Pharmaceutical Services supported the distribution of close to 8 billion doses of COVID vaccines during the pandemic while the company’s core business continued to grow by double-digit percentages annually during the same time, Green told attendees at the Baron conference. The company’s business model allows it to react quickly to stay ahead and support its core business and new drug launches near term or long term, he added.
In addition, the company is growing sales of its highest-value products, Green continued. The trend should continue to remain intact going forward, he added.
Chart Courtesy of www.stockcharts.com
Four Stocks Highlighted at the Baron Investment Conference: CoStar
Andy Florance, the founder and chief executive officer of CoStar Group, Inc. (NASDAQ: CSGP), a provider of commercial and residential analytics, is an example of the kind of visionary leader that the Baron Capital management team looks for when deciding which stocks to buy. Florance has been at the helm of CoStar Group for 37 years to rank as the third-longest serving CEO of all the companies in the S&P 500.
Chart Courtesy of www.stockcharts.com
His tenure is only exceeded by Warren Buffett, the chairman of Omaha, Nebraska-based insurance conglomerate Berkshire Hathaway (NYSE: BRK.A), with 53 years as his company’s chief, and Stephen Schwarzman, a 38-year veteran in heading Blackstone Group (NYSE: BX), an alternative investment management company in New York City. Florance’s tenure at CoStar is more than twice as long as the 18 years that Jamie Dimon has led New York-based J.P. Morgan Chase & Co. (NYSE: JPM), the largest bank in the United States and the world’s biggest one in terms of market capitalization.
CoStar, founded by Florance in his dorm room in 1986, went public in July 1998. The company has served more than one billion clients in total, as well as received one billion-plus visitors to its websites in the past 12 months alone.
Four Stocks Highlighted at the Baron Investment Conference: OnTheMarket
On Oct. 23, CoStar proposed acquiring OnTheMarket, the third most visited residential property portal in the United Kingdom, for £1.10 per share in cash or approximately £100 million. Created by agents in 2013 to provide a competitive alternative to the existing U.K. property portals, OnTheMarket has successfully developed a large network of agents and property listings by taking an agent-friendly approach. OnTheMarket has more than 13,000 agent advertisers and attracts high intent leads at a fraction of the cost of other UK portals.
Four Stocks Highlighted at the Baron Investment Conference: Praise from Skousen
Mark Skousen, PhD, who heads the Forecasts & Strategies investment newsletter and attended the Baron Investment Conference, recommends the Baron Growth Fund (BGRFX, $90), which has a total return of 8.41% so far this year. It includes several companies that Skousen described as “awesome,” including FactSet and CoStar.
Mark Skousen, head of Forecasts & Strategies and scion of Ben Franklin, talks to Paul Dykewicz.
FactSet offers software and a screening process to analyze and manage financial data for individual stocks and funds in competition with Bloomberg and Yahoo, among others, said Skousen, who wrote to his Forecasts & Strategies subscribers that he was impressed the company has had 24 years of expanding earnings growth.
“CoStar profits from the largest asset class in the world — real estate — through its ownership of Apartments.com and Homes.com, both of which dominate the competition such as Zillow,” Skousen wrote to his Forecasts & Strategies subscribers.
Political Risk Mounts with Wars in the Ukraine and the Middle East
Investors need to withstand headwinds of higher-for-longer interest rates, runaway federal deficits and rising political risk with Russia’s unrelenting war in Ukraine amid escalating attacks in the Middle East following the murderous Oct. 7 rampage by Hamas inside Israel.
President Joe Biden invoked the Defense Production Act on Oct. 30 in a technology-related executive order. Such executive orders only are meant to be issued in the most urgent of times, such as mobilizing the nation during war or developing COVID vaccines amid a pandemic. His executive order about artificial intelligence (AI) applied the same authority to make companies prove that their most powerful systems are safe before allowing their use.
That means companies must inform the government about the large-scale AI systems they’re developing and share rigorous independent test results to prove they pose no national security or safety risk to the American people, President Biden said. At the same time, President Biden said he would direct the Department of Energy to ensure AI systems don’t pose chemical, biological, or nuclear risks.
In the wrong hands, AI can make it easier for hackers to “exploit vulnerabilities” in the software that makes American society run, President Biden said.
For that reason, President Biden said he was directing the Department of Defense and the Department of Homeland Security to develop “game-changing cyber protections” that will make computers and critical infrastructure more secure than today. As part of that response, President Biden said his administration would take “decisive steps” to prevent the use of cutting-edge AI chips that could undermine U.S. national security, he added.
Paul Dykewicz, www.pauldykewicz.com, is an award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at StockInvestor.com and DividendInvestor.com. He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is a great holiday gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. To buy signed and specially dedicated copies, call 202-677-4457.