FBR Small Cap - FBRVX
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average rating: 3.70 / 8 ratings
DESCRIPTION:

Date updated:11-08-2007

This fund has a Morningstar rating of 5 stars and is run by Charles Akre. Akre is a portfolio manager and the managing member of Akre Capital Management. He established Akre Capital Management in 1989 and for a time operated it as part of Friedman, Billings, Ramsey & Co ending in 1999. Akre has been in the securities business since 1968.

From Barron's 5-14-07:
"FBR recently reopened the fund to new capital -- for the first time in three years -- some $600 million in new assets have been allocated to the small-cap fund, which now has a total of $1.7 billion. And today nearly a third of the fund -- some $500 million -- remains uninvested."

"Says Akre: "Finding new [investment ideas] is the lifeblood of this business, but we have to stick to our discipline. It's not a simple process."

"He isn't kidding. To qualify for inclusion in Akre's portfolio -- only about 40 names make the cut at any one time -- a company must have the potential to post above-average returns on capital. Ideally, in Akre's eyes, that will come as a result of a regulatory edge, patent protection or other advantage that will keep competitors from nipping at their heels. He also insists on top-quality management teams. "We want them to be excellent at running the business and to see their public shareholders as partners," Akre says."

FBR Small Cap Fund is an open-end fund incorporated in the USA. The Fund's objective is capital appreciation. The Fund invests at least 80% of its total assets in equity securities of small-cap companies. The Small Cap Value Fund considers small-cap companies to have market capitalizations of less than $3 billion, measured at the time of purchase.

Current Returns:

1-Year: 14.68%
3-Year: 19.83%
5-Year: 20.56%

As of 9/30/07

symbol name last price % change open
  • +
  • PENN
    Penn National Gam
  • $23.11
  • -0.52%
  • $23.28

From Barron's 5-14-07: "Many of Akre's favorite stocks are founded and still run by families who retain large stakes in the businesses and thus think like shareholders. A case in point: Penn National Gaming (PENN), which he discovered more than a decade ago. "When we found it, it had five off-track betting locations in Pennsylvania; today, it's the third-largest gaming-venue operator in the country," Akre says proudly." What attracted him to that stock was the combination of the industry's growth potential and the CEO's ambition and commitment. "He had his own money on the line, and had a great sense of what the risk and the potential were -- and we were able to buy at a very modest valuation," Akre adds. The company, which today owns an array of race tracks and casinos, trades at just 11 times Akre's estimate of free cash flow for 2008 and 13 times 2007 estimated free cash flow. Although Akre has held Penn National in the FBR portfolio for most of the fund's lifetime, he sees no reason to unload it anytime soon.

People owning PENN also tend to own: ACGLACMCHHCHRWCKHCLBCPRT

TheStreet.com Rating: C- What is this?

  • +
  • AMT
    Amer Tower Cp
  • $40.67
  • +1.42%
  • $40.03

11.18% of the portfolio

People owning AMT also tend to own: AMATAMXBIDUFMCNKRYRACKSTP

TheStreet.com Rating: B What is this?

  • +
  • MKL
    Markel Cp Hldg Co
  • $332.05
  • -0.32%
  • $333.00

7.73% of the portfolio

People owning MKL also tend to own: ACEAMPAXPBAMBKCNQDNB

TheStreet.com Rating: C+ What is this?

  • +
  • KMX
    Carmax Inc
  • $20.33
  • +0.44%
  • $20.70

3.81% of the portfolio

People owning KMX also tend to own: EMESWYBIGBTHDLTRECLGGPN

TheStreet.com Rating: C+ What is this?

  • +
  • POOL
    Pool Corporation
  • $18.58
  • 0.00%
  • $N/A

From Barron's 5-14-07: "One of Akre's contrarian bets these days is on housing-related businesses like Pool Corp. (POOL), a swimming-pool distributor. Its business, he notes, isn't tied to new-home starts -- some two-thirds of gross profits come from remodeling and maintenance of swimming pools."

People owning POOL also tend to own: AFLDEODNAGSHPQIYZJNJ

TheStreet.com Rating: C What is this?

  • +
  • NDN
    99c Only Stores
  • $15.14
  • -1.62%
  • $15.40

From Barron's 5-14-07: "One of the fund's largest holdings -- nearly 3% of the portfolio -- is 99¢ Only Stores (NDN), a beleaguered dollar-store retailer that didn't file its 10-K for the March 31, 2006, fiscal year with the Securities and Exchange Commission until this April. "Everything that could go wrong with this company, went wrong," says Akre. Management bungled the company's expansion in Texas and ran afoul of new accounting regulations. Akre started buying NDN in late summer of '04 at $13 a share, and kept buying down to 10 a share through year-end '06, convinced the company would resume its historic earnings and growth pattern. These days, the stock hovers between 13 and 15."

People owning NDN also tend to own: AEACSHDGDLTREZPWFCFSQCCO

TheStreet.com Rating: B- What is this?

  • +
  • PNK
    Pinnacle Entertai
  • $7.16
  • -3.11%
  • $7.34

2.76% of the portfolio

People owning PNK also tend to own: BECNFCNGSICGTOPPYXTFRTOA

TheStreet.com Rating: D+ What is this?

  • +
  • BYI
    Bally Technologie
  • $37.96
  • +0.85%
  • $37.72

3.55% of the portfolio

People owning BYI also tend to own: AAPLCAHCCJCMECSCOCVSEBAY

TheStreet.com Rating: B What is this?

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03/09/2007 11:31 AM CST Asked by magician
This fund is reasonably well-diversified - average correlation of returns for the past five years is only +20% - but it holds a number of securities that have provided no useful diversification at all over those five years; amongst the superfluous holdings are: KMX, PNK, AMWD, BYI, ACF, AES, TOL and DHI.

I don't see how Morningstar can give it a five-star rating.

03/09/2007 02:52 AM CST Asked by mock portfolio
This fund is awesome... I am a proud owner, needless to say...

Akre has definately been a great investment for me!

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