Wynn Resorts, Teladoc Health and More Stock Picks From a Market Crushing Midcap Fund
Investors love baseball references. Let the ball come to you; wait for the fat pitch; don’t swing for the fences. Doug Foreman, 63, is guilty of using the occasional baseball cliché, but he also has firsthand experience succeeding in both.
A top-ranked high school player, Foreman was invited to try out for the Los Angeles Dodgers when he was 18. He declined, having already committed to the U.S. Naval Academy.
“I think I made the right decision,” says Foreman, whose batting average as an investor has sent the $2.2 billion Virtus KAR Mid-Cap Growth fund (ticker: PHSKX) to the top of its Morningstar category for every major trailing-return period since he took it over in 2012.
Over the past five years, the fund has returned an average of 22.9% a year, better than 99% of its midcap growth peers. It’s up 41% in 2020, as many of its top holdings have benefited from trends that have been accelerated by the pandemic—cloud computing, telemedicine, and Domino’s Pizza (DPZ) deliveries.
As with all equity strategies managed by Los Angeles-based Kayne Anderson Rudnick, the Virtus fund invests in quality growth companies. There are many ways to gauge the quality of a company—high return on equity, free cash flow, and earnings stability, among others—but those metrics are the result of quality and not what defines it, Foreman emphasizes.
The biggest question investors need to ask, he says, is why customers will continue to pay for a product or service. “This ...
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