Plackett, who runs BlackRock UK Special Situations and the Throgmorton Trust, says he started buying the Bath-based FTSE 250 company back in 1995. Although he has worked for M&G, Merrill Lynch and BlackRock over this time, he says Rotork has always played a major part in his portfolios.
Even though he has seen the share price increase from £2 to near £30, he says he has no plan to sell out as he expects the £2.4bn firm to continue to grow in to "a much larger organisation".
"The obvious place to look was a company that I first met in the 1990s and in 1995 I bought Rotork," said Plackett (pictured).
"I think the share price was £2 when I bought it and it is currently £27.80, having been somewhere around £30 previously."
"The reason why it has been my best decision is because not only has the share price gone up, but because it’s gone up consistently."
"It is a company that has been part of my portfolios for 17 years or so. When you look at small and mid caps it is fundamentally about growth."
"Of course it is a bonus if it is undervalued, but really you are looking for a company that can grow into a much larger organisation."
"Rotork has always been a little bit on the expensive side compared with its competitors, but history has proven that you have to pay a little bit more for better companies. When I first bought it it was trading on 15x earnings; it is now around 20x."
"That means that a vast amount of the growth in share price has come from earnings growth," he added.
According to FE Analytics, if an investor had bought Rotork in 1995 they would have seen returns of 2,460.58 per cent.
Performance of stock since July 1995
Source: FE Analytics
Plackett says he decided to buy Rotork because it had the five underlying company characteristics that have driven his investment process throughout his lengthy career.
"Firstly, we look for an experienced management team. The company is now headed up by Peter France and the team have been able to successfully sell their products but keep control of the business’s development as they have a great strategic focus," he said.
"Then we look for a company with a strong market position. Rotork has a world-leading position in valve actuation, which basically means electronically turning valves on and off."
"It is a function where reliability is absolutely key and Rotork has the best reputation in the world."
"The third characteristic is cash generation. Rotork has very good products and has high and stable growth margins. However, if cash on the balance sheet is ever too high they have the ability to pay out dividends and special dividends."
"We also look at track record and it is a fantastic example of a company that has kept growing and growing and is still relatively small. It is a lot bigger than it was, but it still is not in the FTSE 100."
"The final characteristic we look at is a company’s balance sheet. Clearly a lot of companies were affected by the downturn but one of the reasons Rotork survived was because it runs a conservative balance sheet. It hasn’t taken debt and has good cash generation."
The manager holds 4.1 per cent of his £1.8bn BlackRock Special Situations fund in Rotork. Apart from Plackett’s fund, only 11 other funds in the IMA universe count the manufacturer as a top-10 holding.
These include AXA Framlington UK Select Opportunities and McInroy & Wood Smaller Companies, which are headed up by FE Alpha Managers Nigel Thomas and Tim Wood, respectively.
The five crown-rated Unicorn Outstanding British Companies fund also holds it in its top-10.
Plackett says he will not be selling his stake in the company as he likes to run his winners: "The issue is that your winners will turn out to be much better than you think, but the losers can be equally as bad."
"It just means you want to keep your winners as long as you can to defend against the losers."
This process is similar to that of Standard Life’s Harry Nimmo, who has used it as justification for the increasing mid cap bias of his UK Smaller Companies portfolio.
When it came to highlighting a stock for future glory, Plackett was hesitant, insisting that it is crucially important to run a diversified portfolio of stocks, even for someone who is particularly bullish on the prospects of one or two.
"Obviously I am hoping there will be comparable success across the portfolio," he said.
"Mid and small caps are relatively unpredictable, so it is always best to have a diverse portfolio of shares. We look to hold around 65 to 50 holdings, so the law of averages would suggest that some of those can deliver long-term growth."
"So I wouldn’t like to pick out just one," he added.
Our data shows that Plackett has large holdings in the engineering and manufacturing holding company Senior PLC and the chemical company Victrex – both of which sit in the FTSE 250 index.
Plackett has managed BlackRock UK Special Situations since June 2004. Over that time the fund is the eighth best-performing fund in the IMA UK All Companies sector, with returns of 171.27 per cent.
It has beaten its sector average, which is also its benchmark, by 79.81 percentage points in the process.
Performance of fund vs sector since June 2004
Source: FE Analytics
His fund is a top-quartile performer over three and five years and ranks in the second quartile over one.
BlackRock Special Situations requires a minimum investment of £500 and has an ongoing charges fee (OCF) of 1.67 per cent.