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Ron Baron Expands 5 Positions in 3rd Quarter

Alibaba and Baidu

Baron's fund purchased 337,372 shares of Alibaba and 121,662 shares of Baidu. The two Chinese online media sites averaged $92.68 per share and $173.03 per share, respectively.

As discussed in a previous article, Alibaba maintained sustainable profitability during the third quarter as revenues increased 55%. Even though Baidu reported slightly lower revenues in the quarter, the Chinese online media company produced strong operational performance. Mobile search and Mobile maps monthly active users increased 3% and 7% year over year, respectively, while gross merchandise volumes increased 49% year over year. CEO Robin Li praised the company's improvements to customer quality and increasing popularity of the Baidu news feed.

Both Alibaba and Baidu have a profitability rank of 8, although the former has a slightly stronger financial strength rank. Alibaba has a 28.32% operating margin and a 26.45% net margin, both outperforming over 97% of global specialty retail companies. Despite having a relatively lower operating margin, Baidu has net margin of 45.84%, which outperforms 97% of global Internet content % information companies.

Baidu has a 41.38% return on equity and a 21.71% return on assets, while Alibaba only has a 15.05% return on equity and an 8.57% return on assets. Additionally, Baidu's returns outperform over 93% of competitors.

As both companies offer high value...