Baron Global Advantage Bets Big on Tech

Venturing abroad to find stocks has gotten more challenging lately. But Baron Global Advantage (BGAFX) has found success with a mix of foreign and domestic stocks. Manager Alex Umansky and his team look across borders and at companies of all sizes, hoping to snatch another Amazon.com (AMZN), Alibaba (BABA) or Facebook (FB), some of the standouts in a tailored collection of, at last count, 45 stocks.

See Also: 7 Top Tech Stocks That Could Catch Fire Soon

To narrow the investable universe a bit, the managers ask themselves a set of simple questions: Can this company increase its market value (share price times shares outstanding) five- or tenfold? Do they believe in the management team? Can it create a meaningful and attractive brand?

The fund is drawn to companies that tap into a growing market, dominate it and then tackle adjacent businesses. Amazon, the fund��s second-largest holding, accounting for nearly 5% of assets, is a prime example. The e-commerce giant built its brand by selling and shipping books but is now an ��everything store,�� most recently disrupting drug retailers with its purchase of online pharmacy PillPack, says Umansky.

For Global Advantage, betting on the future beats collecting dividends in the present. ��We��re looking for companies that are aggressively investing for growth, not returning cash to shareholders,�� Umansky says. The fund��s biggest bet is on technology stocks, which make up 53% of the portfolio. Top holding Naspers is a South African internet and media firm with a huge stake in Tencent, China��s internet services giant. Some 13% of the portfolio is invested in Chinese firms, including CTrip.com, known as the Priceline of China.

Data as of July 13. DATA SOURCES: Bank of America Merrill Lynch and Morningstar Inc.

The fund, launched in April 2012, can be volatile. In 2016, it lost 1.2%, compared with a 3.3% gain for its benchmark, the MSCI All Country World Growth index. The unexpected results of the U.S. presidential election created volatility in several of the fund��s U.S. growth companies as in颅vestors shifted temporarily to more-defensive names. Campaign rhetoric about global trade led to double-digit losses in China-based shares. The fund bounced back in 2017 with a 49.6% return, besting 99% of similar funds. Global Advantage is the top performer in its category for the past 12 months.

See Also: 10 Top Nasdaq Stocks to Buy Now Show comments

Stunning correlation between the 10-year and S&P 500 could point to new highs for stocks

The bond market is celebrating a milestone. Two years ago this month, the 10-year Treasury yield bottomed out at a once-in-a-generation low of 1.36 percent.

Since then, the yield has more than doubled to around 3 percent.

Against common thinking, one strategist says this is not necessarily a bad thing for stocks.

��What have we heard, though, really for two years? Higher rates are worrisome and it��s a concern for stocks,�� Ryan Detrick, senior market strategist at LPL Financial, told CNBC��s ��Trading Nation�� on Tuesday. ��But when you take a look at history, that��s not the case.��

During the 23 times the 10-year Treasury yield rose since the early 1960s, the S&P 500 moved higher more than 80 percent of the time.

��Even more significantly, since 1996 (so more recently) 11 periods with the higher trending 10-year yield, every single time, all 11 times, the S&P 500 also went higher,�� added Detrick.

Of those 11 times, the S&P 500 rose by an average 9.5 percent, according to LPL Financial research. Since the 10-year yield hit its multiyear low in July 2016, the S&P 500 has risen roughly 34 percent.

��Should the 10-year break out above 3 percent to new highs, that could be a surprise for a lot of people, it could be really bullish for the S&P 500 going forward,�� said Detrick.

Investors�� concern over a flattening yield curve is also not as damaging to stocks as common wisdom suggests, says Detrick.

��The last time we saw yields going higher with the yield curve flattening was the mid-90s,�� he said. ��We��re not going to have an inverted yield curve any time soon in LPL Financial��s point of view. It could stay flat potentially for a couple of years, kind of like those mid-90s, and the economy could continue to grow along with stock prices.��

An inverted yield curve, typically seen when a bond with a shorter-term maturity has a higher yield than the 10-year, is often interpreted as a sign of an impending recession. The 2-year/10-year yield curve inverted in May 1998 and it was 22 months and a gain of nearly 40 percent before the S&P 500 hit its peak, according to LPL Financial.

The 2-year/10-year yield curve was 32 basis points wide on Tuesday. The spread hit a multiyear low of 24 points earlier this month.

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Somewhat Favorable Media Coverage Somewhat Unlikely to Affect Town Sports International (CLUB) Stock

News stories about Town Sports International (NASDAQ:CLUB) have been trending somewhat positive on Wednesday, according to Accern Sentiment Analysis. The research firm ranks the sentiment of news coverage by analyzing more than 20 million blog and news sources in real-time. Accern ranks coverage of publicly-traded companies on a scale of negative one to positive one, with scores nearest to one being the most favorable. Town Sports International earned a news sentiment score of 0.12 on Accern’s scale. Accern also assigned news articles about the company an impact score of 46.9561786850664 out of 100, indicating that recent news coverage is somewhat unlikely to have an effect on the company’s share price in the near future.

Here are some of the news articles that may have impacted Accern Sentiment Analysis’s analysis:

Get Town Sports International alerts: Town Sports International Reports Fourth Consecutive Quarter of Positive Growth (clubindustry.com) Town Sports International (CLUB) Posts Earnings Results, Misses Estimates By $0.02 EPS (americanbankingnews.com) Town Sports: 2Q Earnings Snapshot (finance.yahoo.com) Town Sports International Holdings, Inc. Reports Second Quarter 2018 Results (finance.yahoo.com)

Several equities research analysts recently commented on the stock. ValuEngine raised shares of Town Sports International from a “hold” rating to a “buy” rating in a research report on Tuesday, April 3rd. Imperial Capital boosted their price objective on shares of Town Sports International to $13.00 and gave the company an “outperform” rating in a research report on Monday, May 21st. BidaskClub raised shares of Town Sports International from a “buy” rating to a “strong-buy” rating in a research report on Friday, May 4th. Zacks Investment Research raised shares of Town Sports International from a “hold” rating to a “strong-buy” rating and set a $11.00 price objective on the stock in a research report on Wednesday, May 2nd. Finally, TheStreet raised shares of Town Sports International from a “d+” rating to a “c” rating in a research report on Tuesday, April 10th. One equities research analyst has rated the stock with a hold rating, one has assigned a buy rating and two have assigned a strong buy rating to the company. The stock has an average rating of “Buy” and a consensus price target of $12.00.

CLUB stock traded down $0.70 during midday trading on Wednesday, hitting $10.10. The company’s stock had a trading volume of 620,200 shares, compared to its average volume of 174,142. The company has a current ratio of 0.91, a quick ratio of 1.08 and a debt-to-equity ratio of -2.58. Town Sports International has a twelve month low of $5.00 and a twelve month high of $14.85. The firm has a market capitalization of $286.18 million, a P/E ratio of -59.41 and a beta of 2.67.

Town Sports International (NASDAQ:CLUB) last issued its quarterly earnings results on Friday, July 27th. The company reported $0.02 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.04 by ($0.02). The business had revenue of $112.33 million for the quarter, compared to analysts’ expectations of $110.71 million. equities research analysts forecast that Town Sports International will post 0.19 EPS for the current fiscal year.

In other Town Sports International news, insider Pw Partners Atlas Fund Iii, Lp purchased 2,806 shares of the stock in a transaction on Thursday, June 14th. The shares were purchased at an average cost of $11.60 per share, for a total transaction of $32,549.60. Following the purchase, the insider now owns 1,503,448 shares of the company’s stock, valued at $17,439,996.80. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. 16.00% of the stock is currently owned by insiders.

Town Sports International Company Profile

Town Sports International Holdings, Inc, together with its subsidiaries, owns and operates fitness clubs in the Northeast and Mid-Atlantic regions of the United States. The company's clubs offer special purpose rooms for group fitness classes; and other exercise programs, as well as accommodate cardiovascular and strength-training equipment.

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