Grant Steers Value Line Growth to High Returns

The Value Line Premier Growth Fund has no bias for investment in particular industries nor does it focus on a given market capitalization. It is, however, according to manager Stephen Grant, an "opportunistic" fund whose 400-plus portfolio of holdings is linked by price momentum potential.

At the open of the markets on Wednesday, October 4, the fund (formerly known as the Value Line Special Situation Fund) was up 3.59 percent, an impressive performance compared to the 0.99 percent tallied by the mid-cap growth funds tracked by Morningstar. In relation, the S& P 500 is up 8.39 percent.

Over the past years the Value Line Fund has averaged an annual increase of 13.46 percent compared to similar funds who have gained only 10.53 percent. In the same period the S&P 500 gained 11 percent.

In assessing positions for the fund, managers look at growth potential as well as earning estimates and evaluate both the price and earning momentum of the given security. Remarkably the annual fund turnover is just 44 percent, a rate of trading that would completely refresh the fund's holdings in about two and a half years.

Top holdings in the fund for June included Cognizant Technology Solutions, Alliance Data Systems, Garmin, and Corrections Corp. The initial fund purchase of Cognizant, for instance, was at 13. Now the stock trades for 75 with a market capitalization of $10.5 billion.

Stephen Grant has managed the fund for ten of its fifty years. "Sometimes momentum turns the wrong way and you have to play a little defense," said the 52-year-old Grant, deprecating his proven track record for making successful market calls.

He described the requirement for a stock to make his watch list as evidence of "quality price growth" indicated by both trading volume and sustained price increases. Grant starts small with his new picks, with purchases usually amounting to around 0.2%.