Allied Owners Action, the young fund that fashions itself as a modern-day Wall Street buccaneer, has named another struggling company it hopes to push down the road to Wellville. Now, the question remains if the fund can translate its lonely niche into a profit for its shareholders.

On Monday, the $3 million fund announced on its companion eRaider.com Web site that it had taken a 1% stake in Comshare (CSRE:Nasdaq - news).

Comshare, an Ann Arbor, Mich., corporate-budgeting and planning software-maker, has seen its shares drop from over 30 to just over 4 since a painful accounting restatement in 1996.

Why would a fund trumpet a stake in a small, sputtering stock that isn't on anyone's radar screen? Simple: That's Allied Owners Action's peculiar raison d'etre. The fund's intention with Comshare is to publicly lobby for new management and a more aggressive use of the Internet.

For most funds, such public activism marks a last-ditch effort to wring a profit from a sagging pick. In the past, pension and mutual-fund giant TIAA-CREF and other high-profile money managers like Ron Baron and Third Avenue Value's Marty Whitman have prodded management in companies in which they have a major stake. But public beefs are Allied Owners' bread and butter.

Although it's an interesting idea, it hasn't paid off for the fund yet. Since launching on March 10, the day tech stocks hit their peak, the fund is down more than 20%, according to MaxFunds.com, a Web site that tracks new no-load stock funds.

While shareholder activism has paid off for some in the past, focusing strictly on activism with small- and micro-cap stocks could be a dicey proposition.

"Companies like these are cheap for a reason. They can work out, but they have a nasty habit of staying cheap," says Russ Kinnel, Morningstar's director of fund analysis.

Allied Owners Action typically takes big stakes in small, sputtering companies the managers think can be resurrected. After buying up to 5% of a company's shares outstanding, the fund's position and corporate prescriptions are announced on eRaider.com, where other shareholders are invited to help lobby for strategy and/or management changes that could help right the company. The goal is to point, or shove, the company in the right direction and reap profits by holding its shares for years.

The fund is run by husband and wife co-managers Aaron Brown and Deborah Pastor of New York's Privateer Asset Management, whose only current client is the fund. Brown, a finance professor at New York's Yeshiva University, picks the stocks, and Pastor, with trading credits from J.P. Morgan and Bank of Montreal, is the fund's primary trader. Martin Stoller, a communications professor at Northwestern University's Kellogg School of Management, is in charge of eRaider.com.

While the strategy has garnered the fund more media attention than typically visits a $3 million fund, many industry watchers question whether its swing-for-the-fences approach can translate into solid performance.

"I think the fund's intentions are good. I like the idea of rallying small investors to the cause. But I'm wondering how you can consistently make money at it," says Kinnel.

Not everyone is so skeptical, though. The fund could perform like institutional leveraged-buyout or LBO funds that bloomed in the 1980s by using their vast assets to take bigger companies and parts of bigger companies private, says Syl Marquardt, director of research at Boston-based John Hancock Funds.

"It's a reasonable investment approach that's been used in the past. In the 1980s, leveraged-buyout funds would acquire companies that were struggling, and many of those funds have had excellent long-term records," he says.

But so far, Allied Owners is focusing on smaller companies, and it doesn't have the money muscle that LBO funds have. Even Brown concedes his fund could be a must-miss.

"I'm not a big believer in jumping into new funds, particularly those with a radical approach," he says. "If we're a good idea, wait three years and look at our record. The only people who should invest now are people who can afford to lose $2,500 (the fund's minimum investment)."

So far, eRaider's announcement hasn't affected Comshare's stock price much. But the news has elicited an oddly cordial online posting from Comshare Chief Executive Dennis Ganster, who, not surprisingly, doesn't address Brown's call for new blood.

To see the risks of playing activist, consider the fund's first target: human-resources outsourcer Employee Solutions (ESOL:OTC BBS - news).

On April 28, the fund announced it had recently taken a more than 4% stake in the company, whose sagging stock was delisted by Nasdaq on March 22. A growth-through-acquisition strategy has saddled the firm with significant debt, making some wonder if it would buckle under the weight of its obligations.

Brown says he favors a different debt-restructuring plan from what the firm's Chief Executive Quentin Smith Jr. has chosen. But Brown says he won't "second-guess" Smith. If that seems a bit too chummy for a guy who has a cannon on his business card, in a Monday night posting from Brown, he threatens to take Employee Solutions to court if the firm didn't provide a list of shareholders Tuesday.

Since the fund announced its stake, Employee Solutions shares have fallen from 51 cents to 37 cents at Monday's close. An Employee Solutions official couldn't discuss the status of the firm's negotiations with its bondholders, but said the fund's sway might be a bit overblown.

"I don't want to belittle what [Brown] is doing. Shareholders want to be heard, and he's helping them do that, but aside from that, he hasn't had an impact on decision-making," says Kevin Duddlesten, Employee Solutions' senior counsel and corporate secretary. Although Brown claims to own 4.6% of the company, Duddlesten's says his math puts the fund's stake at 3.7%.

No matter what the size of the fund's position, the fund is going where almost no one has bothered going lately. After all, Employee Solutions is now a bulletin-board stock, and only six mutual funds owned shares of Comshare before Allied Owners bellied up to the bar, according to Morningstar.

And unless the fund somehow gets a gush of new money -- most of the fund's current assets came from Brown and Stoller's pockets -- it probably will have to focus on deep-value micro-caps. Although its prospectus allows the fund to invest in companies of any size, the fund simply doesn't have enough cash to take fat stakes in flagging, but more durable, big-caps.

It also will take time to build the fund's portfolio, because many of these stocks are thinly traded. Tuesday the fund had fewer than 10 stocks, and at most, will have only 40 stocks, according to Brown.