Oracle Of Apopka

Eddie Brown grew up as a laborer in the Jim Crow South. What he’s accomplished since is one of Wall Street’s greatest untold stories, a study in growing rich on the ignorance of the crowd.

- Antoine Gara

Inside a four-story, sumptuously restored 19th-century town house in the historic Mount Vernon district of Baltimore, three of Wall Street’s best stock pickers are roasting each other in a wood-paneled boardroom as sunlight streams through stained-glass windows.

“Usually when we’re getting rid of something [in the portfolio], we’re getting rid of Kempton’s mistakes,” booms Keith Lee with a laugh, referring to Kempton Ingersol, a Brown Capital Management portfolio manager and the son-in-law of the firm’s CEO and founder, Eddie Brown.

Lee, 59, is the president of $12 billion (assets) Brown Capital and leader of a team of portfolio managers that Morningstar has put in its hall of fame. A former star linebacker at the University of Virginia, Lee was once a New England Patriot. I played “right bench,” he jokes.

It’s about noon on a Wednesday and stocks are sliding. These fund managers are laughing at a time when most other active managers are facing redemptions—a testament to the firm’s counterintuitive approach to finding great stocks. Brown Capital is an old-school stock-picking operation that doesn’t chase the latest fads on Wall Street. The firm hunts for unglamorous but fast-growing companies. Ever heard of Balchem, Bio-Techne, Manhattan Associates, Tyler Technologies or Veeva Systems? They are all top holdings at Brown. And they all have long-term returns that rival Apple’s.

Brown mostly buys growth companies that have revenues of less than $250 million. Its approach is simple: Find businesses that save time, money, headaches and lives. Then determine whether management has the skills to execute a growth strategy that will push their products or technology into new markets. If these criteria are met, load up on the stock and wait.