NEW YORK (TheStreet) -- *F5 Networks*(FFIV), one of last year's
high-flying technology stocks, plunged yesterday after first-quarter
revenue and a sales forecast for the current quarter missed analysts'
estimates.
Mark Schultz, manager of the *MTB Mid-Cap Growth Fund*(AMCRX), says F5
investors ought to take advantage of the decline and "reload."
The mutual fund, which garners three of five stars from fund-tracking
firm *Morningstar*(MORN), has returned 29% over the past year, better
than 87% of its peers. Over five years, the MTB Mid-Cap Growth Fund
has returned an average of 6% annually, outperforming 76% of its
Morningstar rivals.
Welcome to TheStreet.com's Fund Manager Five Spot, where America's top
mutual fund managers give their best stock picks and views on the
market in a five-question format.
You've held F5 Networks a long time. Shares of the company, which
makes software to manage computer networks, slid yesterday, dragging
down *Citrix Systems*(CTXS) and *Riverbed Technology*(RVBD). Are you
sticking with it?
*Schultz:* The company has very strong secular drivers behind it. It
is taking share from competitors like *Cisco*(CSCO) and that's a very
important validation of the quality of their product. And we see this
network-management feature becoming even more important as networks
try to manage the priority of traffic. The stock had a pullback on
quarterly earnings, but we think this gives investors an opportunity
to reload.
What may keep mid-cap stocks in the market's sweet spot in the coming
year?
*Schultz:* I've seen research that they have been in the so-called
sweet spot for the past 70 years in the U.S. The reason is that they
offer investors a compelling menu of companies in which to invest.
They have prudent business models and they are beyond the infancy of
small caps, but they still have a lot of runway ahead of them.
*Green Dot Corp.*(GDOT) went public in the past year. You don't
normally buy companies without long track records in the fund. What is
special about this name?
*Schultz:* IPOs are not normally our specialty in the mid-cap growth
fund. Usually we look for companies with longer trading histories. But
we see the area of prepaid debit cards to be a very attractive one
with long-term secular growth drivers behind it. The company has a
strategic relationship with *Wal-Mart*(WMT), which gives it access to
many customers. And we see "prepaid" increasingly becoming a
replacement for cash and checks.
You also hold *Lululemon*(LULU). Will the clothing company be able to
hold off competitors seeking to enter this niche?
*Schultz:* They may provide a somewhat bigger target because they are
pioneering the area of yoga-wear specifically, but also athletic-wear
tailored to the ladies market. So in that respect, they are ahead of
the market and the people to shoot for. We continue to like the name.
It's been a multi-year holding for the fund and very successful for
us. Source: Thestreet.com
