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Ellenbogen’s Next Big Small-Cap Investment

Small cap companies need a second act to generate returns, and OpenTable is one of them, Henry Ellenbogen of T. Rowe Price's New Horizons Fund said Friday.

"It's a perfect example of a company that's transitioning from high growth to durable growth," he said.

On CNBC's "Fast Money," Ellenbogen said that the market recently became caught up in tech industry's move from desktop computing to mobile platforms.

"When we look at OpenTable, it's a company that got caught up in that concern last year, is really well-positioned in the mobile environment, it has a really durable business model and really is taking some right steps on the technology side to come up with an Act II and be a much bigger company," he said.

Another company Ellenbogen liked was Concur Technologies, which helps track corporate expenses and travel arrangements.

The New Horizons Fund was also an investor in Twitter, although Ellenbogen declined to comment on the privately held company.

(Read More: Twitter Is Worth $8.6 Billion: Hamadeh)

Ellenbogen said that he favored small companies with the management team, internal system and ethos to embrace change and scale into their business model – a phenomenon that occurs with about 30 stocks per decade.

"The whole returns of the New Horizon Fund come from about 20 stocks every 10 years, and the whole idea is to buy companies that initially are less than $3 billion in market cap and then hold on to them, and hopefully one day they'll be much larger companies," he added.

Trader disclosure: On March 1, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Weiss is long VZ; Steve Weiss is long BAC; Steve Weiss is long C; Steve Weiss is long QCOM; Steve Weiss is long SODA; Pete Najarian is long AAPL; Pete Najarian is long JPM CALLS; Pete Najarian is long YHOO; Pete Najarian is long BBRY; Pete Najarian is long BBRY CALLS; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Pete Najarian is long RDN CALLS; Pete Najarian is long MTG CALLS; Jon Najarian is long CRM; Jon Najarian is long PCLN; Jon Najarian is long BWLD; Jon Najarian is long OPEN; Jon Najarian is long YELP; Jon Najarian is long RDN; Jon Najarian is long MTG; Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long MJN; Joe Terranova is long AXP; Joe Terranova is long GPS; Joe Terranova is long KORS; Joe Terranova is long GS; Joe Terranova is long SWN.

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