Nimmo (pictured), one of the longest serving and most successful small cap focused managers available to retail investors, still holds ASOS in his top-10, which is currently trading at about £33 a share. He says he began buying the company in his Standard Life UK Smaller Companies fund and Standard Life Smaller Companies IT shortly after it floated in 2001, making him one of the first ever shareholders.
Nearly 12 years on, ASOS still makes up a sizeable portion of both of his portfolios.
"Due to the scale of returns my best investment has to have been ASOS," Nimmo said.
"Looking at our most recent sales figures, the share price is at £33. When we initially started buying the stock, it was between 80 and 85p. I still love it."
"It still makes up around 5 per cent of the OEIC and the investment trust and has grown its share of each portfolio over time. We have made around 24 times what we’ve invested in it."
"The share price has gone up by about 41 times since we decided to start buying ASOS, but because of the system I use of gradually adding to my holdings, we have to average the price in as a whole. However, 24 times our money is still a good investment," he added.
Nimmo says ASOS is just one of a number of great companies that he has invested in over the years that he has held on to for longer than many of his peers.
"I really like Rightmove, Dunelm, Hargreaves Lansdown and Paddy Power as well, but it is not the end for any of these companies," he explained. "I won’t just sell out of a stock because it has gone up by 20 per cent – we like to run our winners."
ASOS has been one of the best small cap success stories of the last decade.
The company, which now has a market cap of £2.2bn, became part of the FTSE AIM in October 2001.
According to FE Analytics, its share price has gone up 14,224 per cent since flotation. To put it another way, if an investor had put £1,000 into the company at the very start, they would now be sitting on more than £144,000.
Performance of stock since Oct 2001
Source: FE Analytics
Nimmo still has a 4.6 per cent weighting in ASOS in his Standard Life UK Smaller Companies fund, while the company makes up 4.8 per cent of his investment trust.
Eight other open-ended funds in the IMA universe count ASOS as a top-10 holding. Among these is the five crown-rated Marlborough UK Leading Companies portfolio, which is run by fellow small cap expert and FE Alpha Manager Giles Hargreave.
Nimmo is a growth investor through and through. This means that he is unfazed by expensive valuations, as long as he is confident that the company can continue to grow its earnings.
The manager points out that a value investor – such as Investec’s Alastair Mundy or Jupiter’s Ben Whitmore – would have probably disregarded ASOS from an early stage.
"It’s not like I bought it and it was at a distressed valuation; ASOS still looked pretty expensive at 80p," Nimmo explained. "The fact is, high quality and highly visible growth companies are always going to be a bit expensive."
Nimmo cites Domino’s Pizza Group – the British-based master franchisee of US fast food company Domino’s Pizza – as a company whose prospects he is optimistic about.
"A company we made a great deal of money out of, but that has gone a bit sideways over the last couple of years, is Domino’s Pizza Group," Nimmo said.
"It recently acquired a German franchise and that is starting to work. There are currently only around 30 Domino’s Pizza stores in Germany at the moment, but with the new deal there could be thousands, which could see the share price double."
"I think it is a superb avenue for growth and though it may not happen straight away, I am very confident for the company’s outlook," he added.
Over the last three years investors in Domino’s Pizza Group would have seen returns of 85.11 per cent.
The only two portfolios to count the company as a top-10 holding are the five crown-rated Montanaro UK Smaller Companies IT and the open-ended Newton UK Smaller Companies fund.
Nimmo has been running portfolios since January 1997.
His Standard Life Smaller Companies Trust has been the best performer in the IT UK Smaller Companies sector over 10 years, with returns of 909.75 per cent, which is nearly treble the returns of its Numis Smaller Companies benchmark.
FE Trustnet recently pointed out that the trust is on a high discount relative to its one-year average, which could be seen as a buying opportunity just in time for the close of ISA season.
His OEIC has also been a consistent top performer in the IMA UK Smaller Companies sector over the last one, three, five and 10 years. It is soft-closed to new investors, but can still be bought via certain platforms.