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How One Growth Fund Manager Has Made 20% This Year

Posted Jun 19, 2009 04:07pm EDT by Peter Gorenstein

Bob Auer, portfolio manager with the Auer Growth Fund, has a unique stock picking strategy. The Indianapolis-based fund chases growth but also employs an element of value.

The fund only buys stocks that meet the following criteria:

  • 20% quarterly year-over-year revenue growth
  • 25% quarterly year-over-year earnings growth
  • Trades at a P/E ratio below 12

The strategy does lead to volatile returns. Case in point, the Auer Growth Fund is up more than 20% year-to-date. Last year it tanked, losing more than 50%. The fund is less than 2-years old but Auer's long-term track record on his personal accounts -- verified by an independent auditor — has outperformed the S&P 500 over the last 20 years.

Auer is currently hot on Cubist Pharmaceuticals (CBST). The company sells Cubicin, an antibiotic that treats the methicillin resistant Staphylococcus aureus (MRSA). It currently trades at around $18 per share with a P/E ratio of 7. 

He also likes fertilizer stocks including Potash (POT) and Mosaic (MOS). His favorite of the bunch is Intrepid Potash (IPI). This was a high-flying IPO in 2008, trading as high as $76 before the market crashed. Today, it sells for a more modest $27 per-share - a price tag more to Auer’s liking.

36 Comments

Polski
Polski - Friday June 19, 2009 05:53PM EDT

For those who want specifics on what is the problem in the Market, let me give you references for reading. SEC Litigations: #20902, 21042, 21044, 21065. 21066, 21092. All since Feb-today!

Yahoo! Finance User
Yahoo! Finance User - Friday June 19, 2009 06:29PM EDT

MrN - Friday June 19, 2009 04:51PM EDTTwo years back his funds portfolio had $100. Last year it tanked 50% ; fund value $50. This year, it is up a MASSIVE 20% = fund value = 50+10= $60. Wow, good job. Without paying the fund manager any fees, I could have lost 40 dollars of a 100 easily myself. In contrast actually, my ROTH which I self manage has climbed a giddy 80% and then 10 days back I went 60% into cash in it. ++++++++++++++++++++++++++++++++++++++++++++++++++ Exactly right. Anybody that invests with this total moron deserves to lose their money and pay the high management fess for this moron to lose your money. If you can't do better than this idiot, you should be in government bonds (TIPS) and at least it's easy and you will make a bit.

JustinT
JustinT - Friday June 19, 2009 07:55PM EDT

HEY HENRY and BOB Auer who "loves fertilizer stocks" and says "you skip one year... and must use twice the next year." ------- BOB, your investment strategy is like a BAD government program designed to stimulate the economy by encouraging welfare recipients to consume more crack cocain ------- Your mindset and investment strategy is akin and complicit with the banker strategy that got our economy into this mess in the first place. ------- And, HENRY, where are your big kahunas? Do you leave them at the door with your wife? (pipoopip goes your walk) WTF?! HENRY and BOB were you both educated at the same B-rated University that clones pawns and lobbyists? ------- Encouraging increased consumption of petroleum-based products, only further ensnarls the American people in the paralyzing grip of foreign oil, and puppet governments led by pawns and lobbyists. BOB, your “strategy” does nothing to help, support, or sustain the rights and liberties of the American people. ------- In case you missed it, the ONLY LONG-TERM GOAL of your “STRATEGY” is to ensnarl the American people further in debt and dependency on oil, as well as the added expense and continued degradation of our limited fresh water supply, and natural resources. ------- On top of that your approach perpetuates the acceptance and promotion of the faux "FREE" market mentality that externalizes costs onto unsuspecting taxpayers by way of clean-up costs ------- BOB and HENRY, by being silent you are complicit in leaving your grandchildren with the burden of your largess debt (financial and other). MOREOVER, you are traders to the great patriots who founded America, a nation whose cup once runneth over with clean fresh water and natural resources, and is now polluted with corporate pawns and lobbyists ------- I pray that you have some remaining decency to contemplate this over FATHER’s DAY weekend, as you look into the eyes of your children, in whom your legacy will last. AMEN

- Friday June 19, 2009 10:31PM EDT

His performance sucks. His investors got hammered in 2008 - far worse than S&P, Dow and NASDAQ.

Jed
Jed - Friday June 19, 2009 11:51PM EDT

Any assclown who is only up 20% for this year, sucks. We had a two month 20% burn-down that was easy to short, and this 40% runup these past four months. Both those trends were too obvious to miss. About mid-July the trend for the summer will be obvious. So right now, cash out and wait for the next solid trend. DIA tracks the DOW, and DOG tracks opposite the DOW. Too easy.

Tom
Tom - Saturday June 20, 2009 01:17AM EDT

impossibility to comprehend the track record reality.

ELAINE
ELAINE - Saturday June 20, 2009 05:49AM EDT

Bob Auer, Puts out the same old cliches all other bulls do: Money on sidelines, this country is strong, consumer will come back. They (bulls) never ever back up these cliches with facts. Such as, the debt level of this country, the demographics, etc. I am so sick of listening to these idiots. What is going on in the real world - California is one. He may be right for so long but not too long.

Yahoo! Finance User
Yahoo! Finance User - Saturday June 20, 2009 11:11AM EDT

Henry needs to do more of these interviews.I need more stock picks not another doom and gloom scenario or " tent city" piece.

Polski
Polski - Saturday June 20, 2009 12:04PM EDT

When we talk about % Gains, the Pundits are looking forward to when we pass the 52 wk highs, of Sept, and blip of Jan 09. Thus, starting with the Lows of Mar 09, "anything" will look like a Gain. See the Historical Charts since 1929. Everything is up for the long Range, until 2008? What will be the next High as the base, maybe 8500?

EdS
EdS - Saturday June 20, 2009 06:06PM EDT

I will keep my money in Tx co's. Tx didn't ask for Fed funds. We don't need a bail out. Home builders are still building, oil co's here are still drilling, just get on the freeway during the day and try and tell me there is a recession. This town is booming! I fired my fund mgr 07 ,went independent and cashed out Nov 07. Been buying back and selling. Up 12% so far. Still keeping large cash position. Whatch out for the dead cat bounce.

Yahoo! Finance User
Yahoo! Finance User - Saturday June 20, 2009 09:44PM EDT

For now, CD's and precious metals may be the best bet. The economy is not coming back as some of these money managers and Obama administration would like you to believe. Be very careful. Good luck. Read this where to put new money: portfolioforlife.blogspot.com

Stephen
Stephen - Sunday June 21, 2009 12:36AM EDT

ericvonjed has never made a dime in the market or he'd know it's not easy. What kind of tool thinks it's easy to predict random stock market oscillations? The fool with hindsight (a.k.a a bench warmer) , that's who!

Kay
Kay - Sunday June 21, 2009 08:47AM EDT

"Case in point, the Auer Growth Fund is up more than 20% year-to-date. Last year it tanked, losing more than 50%." Lol, you just instantly discredited the guy. Like anyone cares what stocks he is choosing then.

Polski
Polski - Sunday June 21, 2009 05:53PM EDT

Are we talking to the walls?

Yahoo! Finance User
Yahoo! Finance User - Sunday June 21, 2009 07:36PM EDT

Oh boy here come the phony "I made 60% and have to proclaim it to everyone on the internet crowd", If you guys got such great returns you wouldn't be spending all day commenting on these videos. What a Joke. This Auer guy has the stones to do what you want and you are jealous, how sad.

Yahoo! Finance User
Yahoo! Finance User - Monday June 22, 2009 02:54PM EDT

Johnny Ike - Saturday June 20, 2009 05:30AM EDT He is correct in analysis. No doubt about it. Agree....... +++++++++++++++++++++++++++++++++++++++++++++++++++ He he he he he he he ........... How are you and this Auer dimwit doing today, Johnny Ike. Market down 2-3% already and getting ready to retest those March lows. Just keep buying Johnny and Auer. Goldman and JPM have many many millions of shares to sell you yet that they purchased to pump the market up over the last months. Mr Auer, just keep buying and you might yet lose another 50% this year in addition to the 50% you lost last year.

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