BOSTON ( TheStreet) -- This year is the moment of truth for mutual fund managers. As the economy slows and stocks fall, managers' strategies are laid bare, and those who can't make money for investors face the firing squad.The Legg Mason Value Trust, which beat the S&P 500 Index for a record 15 years under Bill Miller, has slumped 10% this year. Ken Heebner's CGM Focus Fund, which used to gain more in one quarter than most funds did in a year, has dropped twice as much as the Value Trust. Even Fidelity's Contrafund has declined 1.9%. The Boston mutual fund firm's Harry Lange, manager of the Magellan Fund, was replaced this week because of poor performance. Brian Lazorishak of the Chase Mid-Cap Growth Fund ( CHAMX) is earning his keep. The mutual fund is in the top 2% of its category in terms of performance this year with a return of 6% and the top 1% over the past 12 months with a 27% gain, as tracked by Morningstar. The S&P 500 Index is down 4% this year and up 8% over the past 12 months. Lazorishak, the lead manager of the fund since 2002, said in an interview that although his best successes have been in consumer companies, Chase Mid-Cap Growth's management doesn't use a sector-focused approach in selecting stocks. Rather, it performs a series of evaluation screens to trim the field down to 600 or so prospects and then applies another test based on fundamentals. Then it reviews each of the finalists for the winners. "We look for positive earnings revisions and good trends for earnings and stock prices. We're not picking fallen angels here," Lazorishak told TheStreet. "The mid-cap space has top performers, but they're not household names. There are companies out there that are doing quite well." The fund is an offering from Chase Investment Counsel of Charlottesville, Va. Here is a synopsis of seven top-performing stocks from the fund's portfolio:
PriceSmart ( PSMT), a California-based company with a $2.2 billion market value, was recently trading near $72 close to its recent 52-week high of $73.19 and it's chart shows a relatively steady climb upward this year. Shares are up 85% this year and 150% over the past 12 months. PriceSmart owns and manages international merchandising businesses that license and own warehouse-type retail membership stores that sell basic consumer goods, including perishable foods. It operates more than 20 stores in Central America, the Caribbean, and Micronesia. Lazorishak said "the company has very strong growth patterns, including same store sales up 20% in the past few months, and it remains reasonably valued." The company has a $2 billion market valuation and recently was trading at $70 per share. Its shares are up 80% this year and 148% over the past 12 months.
Watson Pharmaceuticals ( WPI) is the world's fourth-largest generic pharmaceutical manufacturer. It also operates a branded pharmaceutical division. The health-care sector has not done well due to concerns over proposed changes to Medicare, Lazorishak said, "but this a company saving people money and it is very attractively valued, from our perspective. We've held it for the past year." He said that Watson is seen benefiting when Pfizer's ( PFE) patent on the blockbuster drug Lipitor expires as it will produce a generic version of it. "It will give earnings a tremendous boost." Watson's shares are up 28% this year and 56% over the past 12 months, giving it a market value of $9 billion.
Perrigo ( PRGO) is the nation's largest store-brand, over-the-counter pharmaceutical and infant-formula maker. It operates in four segments: consumer health care, nutrition, prescription pharmaceuticals, and active-pharmaceutical ingredients. The big drug-store chains like offering store brands it makes because it is a higher margin product for them than the name brands, said Lazorishak. "And once people make the switch, and see it works just as well (as the name brand) and cost half as much, they don't go back." Perrigo should also benefit from product recalls from some of the big drug firms, such as Johnson & Johnson ( JNJ), he said, which prompts consumers to move to store brands. Its shares are up 47% this year and 50% over the past 12 months giving it a market valuation of $8.6 billion.