Billionaire investor Ron Baron says buy two beaten-up financial stocks
In a recent interview on CNBC’s “ETF Edge,” billionaire fund manager Ron Baron emphasized the importance of looking beyond the hype surrounding artificial intelligence and large tech companies in 2025. Baron suggested that investors should explore opportunities across various market caps and sectors to uncover hidden gems. As the market undergoes a rotation away from tech stocks, there is a growing interest in undervalued companies, particularly in the financial sector.
Baron highlighted two financial sector companies, MSCI and FactSet, that are often overlooked by individual investors but hold significant potential. Baron Capital, Baron’s investment firm, owns stakes in both companies, citing the strong leadership of their CEOs as a key factor in his confidence in their future growth.
MSCI is renowned for its stock indexes, which are widely used by asset managers, pension funds, and ETF providers globally. Despite its vital role in the investment landscape, MSCI’s stock has not participated in the recent market rally, presenting an opportunity for savvy investors. Baron disclosed that he has been investing in MSCI since its IPO, aligning his investments with the company’s founder and chairman, Henry Fernandez.
On the other hand, FactSet, a provider of financial data and analytics tools, has faced challenges this year, with its stock price declining by nearly 40%. However, Baron remains optimistic about the company’s prospects, attributing the recent downturn to temporary issues rather than fundamental flaws in the business. He pointed to the appointment of Sanoke Viswanathan as the new CEO as a positive development, drawing parallels between Viswanathan and renowned banker Jamie Dimon.
Viswanathan’s impressive background, from a humble upbringing in India to advising top U.S. officials during the financial crisis, underscores his capabilities as a leader. Baron likened Viswanathan’s leadership at FactSet to having a young Jamie Dimon at the helm of a promising company like Bloomberg. He emphasized the importance of investing in companies led by exceptional individuals like Viswanathan, whose vision and expertise can drive significant value creation.
In conclusion, Baron’s investment philosophy emphasizes the significance of looking beyond the mainstream to uncover hidden opportunities in the market. By focusing on companies with strong leadership and growth potential, investors can position themselves for long-term success. As the market landscape evolves, staying open to diverse investment prospects across sectors and market caps can lead to lucrative returns.
