Jensen, Auer Find Growth Amid Rubble

With corporate earnings collapsing these days, some growth funds are modifying their approaches.

Instead of straining to find stocks with rapid earnings gains, portfolio managers are settling for companies that are reporting little or no growth. But not all growth funds have shifted. Some managers are sticking to their rigid disciplines, combing through the stock universe to find the limited number of companies that are still reporting rich profits.

Consider Bob Auer, the consistent manager of Auer Growth(AUERX Quote). Year after year, Auer only takes stocks that grow at an annual rate of at least 25% and sell for a price-to-earnings ratio of not more than 12. "We want to pay less and get more," Auer says. ...