Mutual Fund Manager Talks Tesla, 2 Other Top Picks

Ron Baron is a billionaire mutual fund manager and founder of Baron Capital. He is known for investing in companies for the long-term, often decades. One of the stocks in his portfolio is Tesla which he bought in 2014 and has no plans to sell anytime soon.

On Tuesday he was a guest on CNBC’s “Squawk Box” to talk about his Tesla holding and some of his other top picks.

Tesla Party Just Getting Started

Baron accumulated a 1.6 million share stake in Tesla at an average cost per share of  $219. But he isn’t looking to sell any shares in the near-term because he believes there is still plenty of growth opportunities ahead for the electric automaker.

Tesla has the potential to be among the world’s largest companies over time based on its eventual ability to sell roughly one out of every nine cars sold in the world, according to Baron. Tesla has other opportunities to thrive in batteries and solar panels.

In 10 years Baron said he expects Tesla will generate $1 trillion in revenue, up from an estimated $32 billion in 2020.

Baron isn’t concerned with the recent astronomical surge in Tesla’s price to north of $900 per share. He noted Tesla’s stock was mostly flat from 2014 through mid-2019 and the recent move higher is merely a catch-up phase.

Checking In At Hyatt Hotels

Baron said he bought Hyatt Hotels when it re-listed on the public market during the financial crisis in the late 2000s. He said his fund is among the largest shareholders in the hotel and despite quadrupling in value he remains a buyer of the stock.

Baron is confident in management’s assessment the real estate component of the business is worth around $120 but the stock trades below $90. In addition, management continues to buyback its own stock which reinforces its belief shares are undervalued.

Not Gambling On Penn National Gaming

Baron invests in companies and management teams and few are better in the industry than former chairman Peter Carlino. Baron has been investing in Carlino’s properties for decades and the gaming executive is best known for turning a race track for $25 million and selling it for billions.

Most recently Penn National bought a stake in the popular sports and entertainment media outlet Barstool Sports. The acquisition will help lure more people to its casino properties and help make the company a lot of money.