By Philip van Doorn, MarketWatch
He said Americold is the “best-in-class operator,” and it will be able to consolidate a “very fragmented” industry.
Another fascinating name Ettinger described is ShotSpotter /zigman2/quotes/203800377/composite SSTI +0.29% , which he said was “a very small IPO” that came to market at $11 a share in June 2017. The stock closed at $31.08 on April 10. The company supplies gunshot-detection systems to cities.
“Eighty percent of gunshots result in no 911 call,” Ettinger said, underlining the importance of ShotSpotter’s service. “They have sensors to identify whenever a shot is fired in a particular area so police can respond to all the gunshots, instead of one out of five. This builds a lot more trust with the community.”
The system works with GPS to help police officers pinpoint precisely where a shot was fired, where they often find shell casings or other evidence. The detection system can help police find out how many shooters are involved and what types of guns are used.
“I went to the International Association of Chiefs of Police conference and spoke to at least a dozen police chiefs using the product. They were all singing its praises and how much it has helped them and how this product should really be the standard of any city that has gun violence,” Ettinger said.
ShotSpotter is providing service to about 100 cities. Ettinger called the company “far and away the leader” in its space and said it has “a lot of runway for growth.”
The last example Ettinger named was Planet Fitness /zigman2/quotes/203234487/composite PLNT -3.17% , which went public at an initial price of $16 in August 2015. The stock closed at $70.76 on April 10.
Planet Fitness ended 2018 with 1,742 stores, with all but 76 franchised. The company opened 230 stores last year, 226 of which were franchised, and it expects to maintain a similar growth pace.
What sets the company apart from other gym operators, according to Ettinger, is “their competition is not other gyms, it is the couch.” He said similar words were used by senior managers of Planet Fitness when he met with them.
“About half of their new customers have never belonged to a gym before,” he said.
He likes the franchise model because it requires “little capital expenditure” for Planet Fitness to expand and increase its revenue. “They have the top brand in the industry, and they spend a good deal on marketing to maintain that brand leadership and awareness,” he said.
Ettinger said franchisees are generally happy and that many would like to open more Planet Fitness gyms near the ones they are operating. He believes the company can expand its U.S. presence to over 4,000 gyms.
The Federated Kaufmann Small Cap Fund held 179 stocks as of Feb. 28. This is not a concentrated strategy, so a list of the top holdings may not be especially meaningful — they are top holdings in part because of stellar recent performance. Still, here are the top 10 holdings of the fund (actually 11, because American depositary receipts of Argenx SE were the top holding, while the company’s shares are listed on the Euronext Brussels exchange):
|Ticker||Share of fund||2019 through April 10||2018||3 years|
|Argenx SE ADR||/zigman2/quotes/209927031/composite ARGX||2.1%||33%||52%||N/A|
|Spark Therapeutics Inc.||/zigman2/quotes/200464619/lastsale ONCE||1.7%||188%||-24%||235%|
|Argenx SE||/zigman2/quotes/209977721/delayed BE:ARGX||1.6%||32%||62%||977%|
|Veeva Systems Inc Class A||/zigman2/quotes/202850210/composite VEEV||1.3%||52%||62%||433%|
|Rapid7 Inc.||/zigman2/quotes/203905856/composite RPD||1.2%||70%||67%||317%|
|Ultragenyx Pharmaceutical Inc.||/zigman2/quotes/204970392/composite RARE||1.2%||68%||-6%||4%|
|Alteryx Inc. Class A||/zigman2/quotes/202651591/composite AYX||1.1%||37%||135%||N/A|
|Inspire Medical Systems Inc.||/zigman2/quotes/209639226/composite INSP||1.1%||32%||N/A||N/A|
|Planet Fitness Inc. Class A||/zigman2/quotes/203234487/composite PLNT||1.0%||32%||55%||439%|
|UniQure NV||/zigman2/quotes/203652599/composite QURE||1.0%||102%||47%||326%|
|Sources: Federated Investors, FactSet|
Veeva Systems /zigman2/quotes/202850210/composite VEEV -1.45% is a particular favorite of Amy Zhang, manager of the Alger Small Cap Focus Fund /zigman2/quotes/207263247/realtime AOFAX -1.12% , who talked about the company in February.
The Federated Kaufmann Small Cap Index Fund has six share classes with different expenses. The class A shares technically have a sales charge of 5.50%. However, sales charges may be waived depending on the relationship between your broker or financial adviser with Federated Investors. The total return figures shown below are net of expenses but exclude any sales charges.
The benchmark for the fund is the Russell 2000 Growth Index /zigman2/quotes/210598147/delayed RUT +0.14% . Returns for the S&P 600 Small-Cap Index, the S&P 400 Mid-Cap Index /zigman2/quotes/219506813/composite MID -0.67% and the S&P 500 Index /zigman2/quotes/210599714/realtime SPX +0.08% are shown for comparison, along with those of the fund’s Morningstar category.
|Total return - 2019 through April 10||Average annual return - 3 years||Average annual return - 5 years||Average annual return - 10 years||Average annual return - 15 years|
|Federated Kaufmann Small Cap Stock Fund - Institutional /zigman2/quotes/204166501/realtime FKASX||24.8%||29.3%||17.1%||19.1%||11.2%|
|Morningstar Small Growth category||18.1%||16.6%||9.0%||15.4%||8.6%|
|Russell 2000 Growth Index /zigman2/quotes/210598133/delayed XX:RUO||20.0%||16.1%||10.0%||15.7%||8.7%|
|S&P 600 Small-Cap Index /zigman2/quotes/210599868/delayed SML||15.0%||14.5%||9.8%||16.1%||9.7%|
|S&P 400 Mid-Cap Index /zigman2/quotes/219506813/composite MID||17.5%||12.7%||9.5%||15.5%||9.6%|
|S&P 500 Index /zigman2/quotes/210599714/realtime SPX||15.9%||14.5%||11.8%||15.3%||8.6%|
|Sources: Morningstar Direct, FactSet|
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