NEW YORK ( TheStreet) -- David Rainey, manager of the FBR Focus Investor Fund ( FBRVX), initiated a stake in Google ( GOOG) because the company is cheap even though it dominates the search and advertising markets.

The money manager also favors American Tower ( AMT) and Penn National Gaming ( PENN).

The mutual fund, which garners four of five stars from Morningstar ( MORN), has returned over 36% over the past year, putting it in Morningstar's 87th percentile for mid-cap growth funds. During the past 10 years, the FBR Focus Investor Fund has risen an annual average of 12.2%, placing it in the top 1% of all funds in this category.

Welcome to TheStreet'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.

American Tower will be converting to a REIT over the course of the next year. What does this mean for the company?

Rainey: It means that a new class of owners will come in and begin to participate in the stock. It's likely to be added to two or three of the major REIT indices. It will be one of the largest REITs out there with probably twice the REIT growth rate so we expect it to get a lot of new interest.

There's currently a bid for 99 Cents Only Stores (NDN). You have a large position in the stock. What's your take?

Rainey: We've been shareholders for five to seven years. We're actually slightly larger than a 5% position in the stock. We changed our filing status from 13-F to 13-D because we felt it was important to share our opinions about the proposed buyout price, which we believe undervalues the shares right now, so we've been sharing our opinions with management. We're not against the buyout. We just want a fair price for our shareholders.

You've been a longtime holder of O'Reilly Automotive (ORLY). What's your target for the stock?

Rainey: We don't tend to think of it in terms of price, but for O'Reilly, they continue to integrate well with West Coast operations of CSK. They have added a lot of operational value and a lot of purchasing power to the name. Same-store comps are still very positive. That said, it's still kind of a stumbling recovery. We would expect to own the stock for the next three to five years.

A lot of states are plugging holes in their budgets by adding casinos. How is this affecting Penn National Gaming?

Rainey: Penn has put about a billion and a half dollars into new casino projects in Maryland, Ohio and Kansas, and continues to work on some new jurisdictions. So it's actually been a very fertile opportunity for Penn.

Why have you recently added Google to your portfolio?

Rainey: Google's obviously a large-cap name with about $40 billion of cash on its balance sheet. When you back out the cash, we figure we're buying the leading light in search and one of the leading lights in placement advertising for about 12 times forward earnings. It's a cheap stock and good things happen to cheap stocks.

-- Reported by Gregg Greenberg in New York.

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