When RS began buying the stock about four years ago, MarketAxess controlled 7% of its market. The analysts figured that the growing business could control 15% in the next five years. The business met the target. Now the RS managers are continuing to hold the stock because they believe that the company can control 30% of the market in the next five years.
"They are using their technology to transform the European industry," Tracy says.
MarketAxess isn't cheap. The stock has a P/E multiple of 34. But its revenue rose 34% last quarter, and the company has a profit margin of 31%.
One holding in RS Mid Cap Growth is Core Laboratories (CLB), which takes core samples and uses other techniques to help drillers locate oil and gas.When RS started buying the stock five years ago, the company had operations in about 400 of the largest 4,000 oil fields. Now the company is in 1,000 fields, and RS figures that the business can grow to serve 2,000. "Core Laboratories has new products that will allow it to penetrate more oil fields," Tracy says. One holding in RS Growth is Precision Castparts (PCP), which makes parts for aircraft. The company's revenue rose 23% in the last quarter. Tracy says that Precision Castparts will take market share from competitors by producing parts that are lighter and stronger. At the time of publication, the author had no position in any of the stocks mentioned. Follow @StanLuxenberg This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.