New Zealand-based fund manager Pie Funds Management produced an outstanding return in 2013 for investors in the PIE Australasian Growth Fund. The NZ$52 million fund produced a return of 25.9% for the year, while its five-year return stands at an exceptional 38.6% per annum.
The fund's objective is to identify smaller companies that exhibit both 'value' and 'growth' characteristics, but whose potential is not being fully realised by the market. Given Pie's impressive track record for identifying investment opportunities, here are four stocks currently held by the fund which could be primed for growth.
1) Titan Energy Services Ltd (ASX: TTN) provides shareholders with exposure to the oil and gas sector via its drilling, portable camp hire accommodation and ancillary services businesses. The stock has experienced a recent dip in its share price which could present a buying opportunity, however it should be noted that the stock is still up 87% in the past 12 months.
2) Vita Group Limited (ASX: VTG) owns and operates telecommunication retail stores under the brands Telstra, Fone Zone, One Zero and Next Byte. Vita recently announced that it had reached an agreement with Telstra Corporation Ltd (ASX: TLS) to expand the number of Telstra-branded retail stores beyond its current 85. The deal includes the acquisition of a number of stores currently owned by Telstra.
3) Empired Ltd (ASX: EPD) is a provider of Information Technology (IT) services ranging from business consulting to applications systems development. Since listing in 2007 the company has made four acquisitions including the acquisition of OBS during 2013. In 2013 Empired also won a number of key contracts including a project to deliver a mining services upgrade which the company described as a "game changing contract."
4) PS&C Ltd (ASX: PSZ) is a new addition to the PIE Australasian Growth Fund, as the company only listed on the ASX late last year via an initial public offering (IPO). Similar to Empired, the company also provides consulting and professional services to the IT and communications sectors. The shares are currently trading at 91 cents per share which is a discount to the IPO offer price of $1.
Foolish takeaway
It can be tough to mimic the portfolio of a fund manager with a history of outperforming to produce similar outperformance yourself. However observing the portfolios of others can help generate investment ideas. When screening other investors' portfolios it is best to focus on the very best (or overweight) positions of outperforming fund managers.
