Shares of Manhattan Associates (MANH - Get Report) are down 17% year to date, but the supply chain software provider is expanding market share and will soon bounce back, said John Heffern, senior portfolio manager at Chartwell Investment Partners.
"There is lots of growth on the top line there, and lots of margin expansion on the bottom line," said Heffern. "It fits a theme we are thinking about overall, which is market share capture in a slow-growing economy, margin expansion and then capital allocation."
Heffern is also bullish on Ultimate Software (ULTI) , which has seen its shares drop over 8% so far in 2016. He said the human resources software provider may trade at a pricey 44 times its 2017 earnings. However, it is worth the high multiple in his view because it is hard to find growth in the current environment.
"Manhattan and Ultimate have pulled back as people have become concerned about global growth," said Heffern. "We think they will pull through quite nicely."
"Business on the consumer side, particularly in boating, is surprisingly strong, and we are quite keen on Brunswick as they show revenue growth, margin expansion and the trifecta of capital allocation: M&A, stock buybacks and dividend expansion," said Heffern.
Finally, Heffern is a fan of Intercontinental Exchange (ICE - Get Report) , which is down 8.5% so far in 2016. CEO Jeffrey Sprecher is an exceptional acquirer and integrator of companies, Heffern said. He also likes the fact that ICE is a "toll-taking" platform from which Sprecher can monetize the reams of data that pass through its systems every day.
"He has proven he won't overpay, but he is aggressive," said Heffern. "Once he wins, he knows what to do with the prize."