A company set to profit from Microsoft's Windows 10 update and a firm primed to grow after a recent TV advertising campaign are among the stocks driving Citywire AAA-rated Mark Niznik's outperformance.
Niznik's (pictured) Artemis UK Smaller Companies fund has returned 61.2% over the three years to June 2018 compared to the sector average of 49.8%.
Here are the fund's top five holdings, which Niznik is banking on for long-term growth.
'Computacenter is one of the largest IT suppliers to large companies in the UK, Germany and France.
'The company has one of the longest serving management teams of any company quoted on the UK market.
'They have built a great record of earnings growth and strong cash generation by being a trusted IT partner to large companies.
'With the growth in cloud computing and the network and security issues that brings, we think the company’s recent good trading is likely to continue as it helps customers update their IT systems to cope with the fast pace of change.
'The Microsoft Windows 10 update is likely to provide a rich vein of business for the company over the next couple of years.'
'Mears is the largest social housing maintenance contractor in the UK. It operates under long-term contracts with councils and housing associations, with funding backed by tenant rents.
'This provides a high quality, recurring earnings stream which the company has grown successfully over the years.
'While some councils’ project spending has been delayed in the short term, we have taken advantage of Mears’ share price weakness to add to our holding.
'The 9% free cashflow yield suggests many investors have given up on Mears.
'But the company’s bid pipeline of new contracts is strong at a time when there are few credible suppliers for these large contracts.'
'4imprint is the largest online provider of promotional products to companies in the US. This scale enables 4imprint to attract small- and medium-sized US companies to its website at far better prices than anyone else through its efficient marketing operation.
'Meanwhile, it offers them a broader and better value range of products through its strong buying power. With little need to hold stock, the company generates an extremely attractive return on invested capital.
'This translates to prodigious cash generation, even as it grows sales strongly. With a recent trial TV advertising campaign showing success, we think there is a good chance that the company can reduce its reliance on Google and still drive faster growth.
'We expect most of the (growing) 4% free cashflow yield to be returned to shareholders through a combination of ordinary and special dividends.'
'Biffa is one of the largest waste collection and recycling companies in the UK. Operating across a number of divisions, the core business is the leading collector of waste from industrial and commercial companies in the UK.
'The network scale advantage of their 75,000 customers and over 1,000 waste trucks means any new customers that they can add to their existing network are very profitable. This provides a growing earnings stream with high barrier to entry.
'With increasing pressure from the public and government to increase recycling of waste, we think Biffa has a good opportunity to grow its recycling activities. It trades on a price to earnings ratio of 12x and offers a 6% free cashflow yield.'
'RM Group is the largest supplier of IT to schools in the UK. Having recently bought the second largest school consumable supplier, the company is making good savings by combining buying power while lowering distribution costs from a more streamlined base.
'The company is also benefitting from growth in on-line exam-marking, where it is a leading player.
'We like the current management team which has led the company through the travails of the demise of the previous government ‘Building Schools for the Future’(BSF) programme; while delivering upgraded earnings.
'As the last of the BSF contracts falls away next year, we expect the strong past cashflow to start showing though again - and see a 9% free cashflow yield as extremely attractive.'