Mutual fund Langston makes Panther City roar

Panther City Capital

Panther Capital Group

600 Texas Street

Suite 202

Fort Worth 76102

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Mythical was the sighting of a sleeping panther in downtown Fort Worth that led to the city’s nickname Panther City. Rarer still in Fort Worth: a locally-based mutual fund.

So it’s fitting that small cap investor John Langston, founder and president of the Panther Capital Group in the city, on Dec. 31 launched his first mutual fund named after the elusive creature: Panther Small Cap Fund.

Langston, who founded Panther Capital in 2009 and said he has under $10 million in assets under management, said in an interview that money managers and investors have committed $5 million to his new fund. Its style will be small cap blend, looking for growth stocks and value opportunities in misunderstood companies and beaten-down sectors, Langston said.

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“The way I’ve found to make money in the market is to somewhat go against the crowd,” he said. “That’s the way to make money over time.”

Langston says he expects the growth of assets under management in the fund to take time.

“Most people manage their mutual funds through their adviser,” he said.

But big traditional investment firms like Merrill Lynch require a three-year track record “before you can get in the door,” he says.

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The requirements are less so for independent advisers like Charles Schwab, he said. “I’m in the queue right now to get on a Schwab platform,” he said.

Langston is a graduate of Paschal High School – which uses the Panther as its school symbol – and Clemson University. He also holds a TCU MBA and is a chartered financial analyst. Langston got his start with a Fort Worth real estate investment partnership and became a private banker at Bank of America. He was a senior analyst at Hodges Capital Management in Dallas, where he was an equity research analyst focusing on small caps and helped manage more than $1 billion in assets.

Getting placed on independent advisers’ platforms, closing on investors’ commitments to his new fund, and establishing a performance record in it are first orders of business.

Langston, who just moved into new offices on the second floor of a modest two-story building on Texas Street downtown, plans to hang his hat on his availability to investors and advisers. He’s the fund manager and the research department.

“I would like to hire a full-time analyst soon,” he said. “I just haven’t found the right guy.”

Eighty percent of the fund will be in small caps, Langston said. He looks for shares of companies whose stories he believes are misunderstood. One example: Fort Worth-based Pier 1 Imports, whose shares were trading at about $16.60 midweek, compared to a 52-week high of $20.85.

“They’re transitioning their business from bricks and mortar to omni-channel,” including an expansion of e-commerce, Langston said. “That’s hurt them in the short-term. In the long-term, it should be a good stock to own.”

Among sectors, “right now, industrials are attractive, trucking is attractive,” he said. “With what’s happened to oil and gas stocks lately, you just have to think there’s opportunity there.”

What’s he avoiding?

“I’m being very selective in oil and gas,” he said. “This drop in oil prices is an opportunity to pick up some value, but you’ve got to tread lightly.”

While he’ll focus on stocks that are in the Russell 2000 index, Panther Small Cap won’t track the index, Langston said.

“It’s not going to be an index fund,” he said. “This will be a bottom-up fund [with investments based on] a fundamental research process.”

This story was published in January 2015.