Shares of Financial Engines (FNGN) are down 20% so far this year, but the retirement solutions provider should see its fortunes improve once its latest acquisition starts paying off, said Sandy Villere, portfolio manager for the Villere Balanced Fund (VILLX) .
"They just bought the Mutual Fund Store from Warburg Pincus and Warburg is going to stay on," said Villere. "Warburg took stock rather than cash, which is really a sign of confidence to me, and now they will own 13% of the whole."
The Villere Balanced Fund is down 1.7% thus far in 2016, according to fund-tracker Morningstar. The $94 million fund has returned an average of 5.4% annually over the past 10 years, outpacing 69% of its peers in Morningstar's small growth category.
Villere is also bullish on Taser (TASR) , up 12% year-to-date, despite its rich valuation of 39 times its 2017 earnings. Villere said the company has been relying on its non-lethal weapons to carry the sales load in recent years, but is now seeing more top-line input from its body camera software.
"If you look at the top 50 police departments, 24 of them have issued contracts for body cameras to vendors so far and Taser has won 22 of those, so they are really winning the battle for body cameras," said Villere, adding that Taser pockets a monthly recurring revenue stream from the data entered by officers.
Villere is positive on 2U (TWOU) , down 17% thus far in 2016, saying the education software provider has partnerships with major universities in the country and will keep adding more.
"There's a long roadway ahead because these guys have 26 programs in place right now, six more on the way this year and nine more the following year. You can see how this company is going to take off," said Villere.
Finally, Villere is a fan of auto parts seller LKQ (LKQ) , which is up 2% thus far in 2016.