Hennessy Cornerstone Growth Fund, Series II (HENLX)

Overview
The Hennessy Cornerstone Growth Fund, Series II seeks long-term growth of capital by investing in 50 growth-oriented stocks selected by the purely quantitative Cornerstone Growth Formula . While it has historically selected small cap companies, the Formula may select mid and large cap companies. The Fund utilizes the same time-tested investment formula employed by the Hennessy Cornerstone Growth Fund, but it is rebalanced at a different time of year, in order to create as different portfolio of stocks as possible.

Investment Strategy
The Hennessy Cornerstone Growth Formula marries value with momentum. Stocks for the portfolio are selected by strictly adhering to the following time-tested, quantitative formula:
Download Fund Fact Sheet
Market capitalization exceeding $175 million
 

The lower boundary on market capitalization excludes micro cap stocks, which can be difficult to trade without affecting their stock price.
Price to sales ratio* below 1.5
 

This value criteria helps to uncover relative bargains. The formula chooses sales as its guide because sales figures are more difficult for companies to manipulate than earnings and frequently provide a clearer picture of a company's potential value.
Annual earnings higher than the previous year
  While sales may be the best indicator of a company's value, the formula considers improvement in earnings beneficial as an indicator of a company's financial strength.
Positive stock price appreciation, or relative strength, over 3 and 6-month periods
  Historically, relative strength has been one of the most influential variables in predicting which stocks will outperform the market.
Select the 50 stocks with the highest 12-month price appreciation
  The portfolio is rebalanced once annually, generally in the Summer
 
Fund Information as of 09/30/11
Equity Sector Weighting
Consumer Discretionary 43.0%
Consumer Staples 4.3%
Energy 7.9%
Financials 7.1%
Health Care 5.3%
Industrials 15.3%
Materials 9.4%
Telecommunication Services 1.3%
Top 10 Holdings
Dominos Pizza, Inc. 2.7%
Crosstex Energy, Inc.. 2.6%
PriceSmart, Inc. 2.6%
DFC Global Corp. 2.5%
Genesco, Inc. 2.4%
Sally Beauty Holdings, Inc. 2.4%
AmTrust Financial Services, Inc. 2.4%
Oxford Industries, Inc. 2.3%
Aaron's, Inc. 2.3%
Tractor Supply Co. 2.3%
Domestic/Foreign Holdings
USA 93.7%
Cash and Other Assets, Less Liabilities 6.3%
Fund Information
Total Net Assets $22 million  
Beta (vs. S&P 500)** 1.21  
  Original Class Institutional Class
Expense Ratio 1.62% Gross 1.40%; Net 0.98%***
CUSIP 425 88P 106 425 88P 304
Ticker HENLX HINLX
SEC Fund Identifier
Series S000000837 Series C000000837
  Class C000002452 Class S000060825
Inception Date 7/1/05 03/03/08
Minimum Investment $2,500 $250,000****
Minimum Investment (IRA) $250 $250,000****
Portfolio Composition
Equity
93.7%
Cash
6.3%


Performance as of 09/30/11
Average Annual Total Returns
3 Months
YTD
1 Year
3 Year
5 Year
Since Inception
(7/1/05)
HENLX
-26.17%
-21.91%
-7.15%
-3.50%
-10.65%
-7.82%
Russell 2000 Growth Index
-22.25%
-15.57%
-1.12%
2.07%
0.96%
2.62%
S&P 500 Index
-13.87%
-8.68%
1.14%
1.23%
-1.18%
1.22%
Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by clicking here.
Year by Year Total Returns
 
2006
2007
2008
2009
2010
HENLX
5.23%
-6.45%
-53.80%
25.20%
27.13%
Russell 2000 Growth Index
13.35%
7.05%
-38.54%
34.47%
29.09%
S&P 500 Index
15.80%
5.49%
-37.00%
26.46%
15.06%

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The Fund’s composition and sector weightings are shown as a percentage of the Fund’s total net assets. Portfolio composition and sector weightings are subject to change at any time and should not be considered a recommendation to buy or sell a particular security. The S&P 500 and Russell 2000 Growth are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

Small and medium-capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. Investments in foreign securities involve greater volatility and political, economic and currency risk and differences in accounting methods.

* Price-to-sales ratio is a tool for calculating a stock's valuation relative to other companies. It is calculated by dividing a stock's current price by its revenue per share.

** Beta is a measure of a portfolio’s sensitivity to market movements (as represented by the S&P 500). The index has a beta of 1.0. A beta of more (less) than 1.0 indicates that a fund’s historical returns have fluctuated more (less) than the index.

*** The expense ratio is contractually capped at 0.98% indefinitely.

**** Initial minimum investment of $250,000 may be waived for certain fee-based or retirement plans.