Bennett Lawrence Management was founded by Van Schreiber in 1995. The hedge fund is primarily focused on small- to mid-cap companies, and prefers growth potential over value.
As you probably know, we at Insider Monkey choose to follow the hedge fund industry’s most elite money managers, due to their market-beating potential; learn the details here. Bennett Lawrence’s Q2 stock picks are out a bit ahead of the rest of its peers, so we’ll take a look at the fund’s top five, led by residential and commercial floor manufacturer Mohawk Industries, Inc. (NYSE:MHK).
Mohawk is known for its rug and carpet operations in North America and Europe, and an impressive earnings history–and recovering Eurozone–has led to a +40% return in 2013 alone. Shares of Mohawk Industries, Inc. (NYSE:MHK) trade at a PEG ratio below 1.0, and do not currently pay a dividend yield. With earnings growth expected to eclipse 30% a year over the next half-decade, income investors could see their fortunes rise sooner rather than later, but we think Bennett Lawrence is here for the GARP (growth at a reasonable price) play first and foremost.
SanDisk Corporation (NASDAQ:SNDK) is next up in Bennett Lawrence’s equity portfolio, with a $14.4 million position. The stock is up over 30% in 2013 alone, and is part of a general, ongoing flash memory boom in the broader marketplace. Wall Street expects earnings growth to flirt with 25% a year over the next half-decade, and investors are underrating this forecast–shares trade at a PEG of 0.78.
Even if this growth estimate falls more in line with peers like NetApp or Brocade, investors can still get a good GARP play right now. Make that two-for-two with SanDisk Corporation (NASDAQ:SNDK).
If you surveyed the broader marketplace about multi-baggers in 2013, most would probably mention Tesla and a biopharma company, but Groupon Inc (NASDAQ:GRPN) would probably not be on that list. Shares of the daily deals discounter are up over 100% this year, though, and have been on the rebound ever since Eric Lefkofsky took over as CEO.
The head honcho’s latest move has been to admit that he sees Groupon Inc (NASDAQ:GRPN) as the “Amazon/eBay/Craigslist” of the future, and investors have to like that vision. Earnings are predicted to grow by more than 100% next year.
Pharmacyclics, Inc. (NASDAQ:PCYC) and Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) round out the top five, and both biopharma stocks are up over 60% this year. Talk about a good bunch of picks; Bennett Lawrence knows what they’re talking about.
With that being said, we’ll continue to watch Groupon Inc (NASDAQ:GRPN), SanDisk Corporation (NASDAQ:SNDK) and the rest of this group for the remainder of this year and beyond. Their past performance–and Bennett Lawrence’s conviction–warrants that.