Baron Small Cap (BSCFX)

Cliff Greenberg, manager of the Baron Small Cap fund (BSCFX) has been buying stocks of high-quality companies with growth potential at greatly reduced prices. Short-term earnings have remained flat, but long term outlook is optimistic. According to Greenberg, the markets won’t bounce back until “the world rights itself.” He is unwilling (or unable) to make a prediction of when this will be.

One of the stocks that Baron Small Cap (BSCFX) has been purchasing is Covance (CVD) which is currently trading for $39.21, with a 52 week high of $99.08. The company’s 52 week low was $31.43. Covance (CVD) provides research services for pharmaceutical companies and Greenberg expects the big drug companies to increase the amount of research services that they outsource. This should lead to increased revenues for Covance (CVD) and a rebound in stock prices.

The chart above shows how Baron Small Cap (BSCFX) ten year annualized return of 4.15% compares to has compared to the S&P 500 over the last ten years, even after suffering through its worst year in 2008.