“Everything in the portfolio has revenue growth of at least 10%,” Ely said. About half of the company’s sales are made directly to consumers through its website, according to Ely, who called the online sales momentum “massively deflationary.” It makes products for use in outdoor and recreational activities. With housing demand so high in the U.S., the company’s ability to install insulation at low cost makes it appealing to home builders of various sizes. Installs insulation and distributes other building products. SiteOne’s acquisition strategy in the highly fragmented landscape supply industry offers a long runway for growth and efficiency improvement, Ely said. This is an obvious play in a country that is very much on the move, as technological changes eliminate the need for some people to live within commuting distance of offices in large cities. Is “wrapping up the fragmented business of landscape distribution - dirt, topsoil, trees and gravel,” according to Ely. and the company says it is “one of the largest recyclers of waste polyethylene plastic film in North America.” Trex’s primary market is residential, but you may have seen its faux wood products used at outdoor restaurants, parks or docks. Is the world’s largest supplier of composite materials used in place of wood, including decking, fencing and railing. He described a “pure growth approach” that avoids overconcentration in any sector or industry, and named four companies as examples held by the Delaware Smid Cap Growth Fund: He sees the digital transitions as being deflationary because of efficiency improvements, and believes these trends will mitigate inflation over the long term.īut when selecting stocks, the growth opportunities from disruptions in the economy that Ely identifies don’t necessarily spring from digital innovation.

The Delaware Smid Cap Growth Fund typically holds about 35 stocks of small-cap and mid-cap companies that Ely believes are well-positioned to continue growing quickly as they take advantage of disruptive trends.ĭuring an interview, Ely said the pandemic was a “tipping point” for “massive disruptions through innovation,” including remote work and video conferencing in place of business travel, to name two examples.

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