Montgomery says his models use a combination of fundamental, financial and technical indicators to buy and sell stocks. The model has been picking up former growth stocks that are now value stocks, based on growth at reasonable prices.
His largest holdings are in the industrial materials, consumer cyclicals and noncylicals and financial companies. "The market is pulling back (as much as 50%) on the small value side," he says. "With the retrenchment of stock prices, we are buying growth at reasonable prices. There are more companies on the value side."
Montgomery says he has been accumulating shares of existing holdings as well as adding new positions. Last February, he bought stocks like Columbus McKinnon, which manufactures material handling equipment, and Gulfmark Offshore, an oil support services firm.