The Stocks the Funds Are Buying

We all know who's on Wall Street's Wish List. What I want to know -- and I'm guessing you do, too -- is who's doing the wishing. Which funds are buying the week's top stocks in our Motley Fool CAPS investor-intelligence database?

Once again, here's our group of contenders:

List-topper Sequenom, which sells gene-testing equipment, has a few fans among the top stock pickers. Trouble is, all but one of them hail from the Fidelity family of funds. Booooorrrrrring.

Not so with Immersion, which specializes in touch-screen technology. Here are four funds buying this stock now:

• Nicholas-Applegate U.S. Micro Cap (NAMCX), which made our list last week, and which is a proven market-beater. (More on that in a minute.)
• Mass Mutual Select Small Company (MRWAX), which sports an awful 5.75% front-end load and hasn't had a winning year since 2003. 
• T. Rowe Price Extended Equity Index (PEXMX), which seeks to match the returns of the Wilshire 4500 index of mostly small- and mid-cap stocks in exchange for a reasonable 0.40% annual expense ratio.
• SA U.S. Small Company (SAUMX), which, like Nicholas-Applegate U.S. Micro Cap, is a repeat performer. Top stock picker Robert Deere has managed this fund since March of 2005.

Of these funds, it's the first of our two-timers, Nicholas-Applegate U.S. Micro Cap, which interests me most. Here are its top five stock positions:

This strikes me as an exceptional portfolio. Consider Dawson Geophysical, which trades in seismic data, and which has been a big winner for Motley Fool Hidden Gems subscribers. CAPS All-Star TMFPlatoish, known around here as Stan Huber, explains why:

Dawson looks like a nice small cap, medium growth story in a strong services niche, which should be in demand for quite some time. Their management team is quite transparent, continually learns how to tell the investment community what it needs to know, takes the needs of their customers quite seriously, and is truly invested in their employees. They should outperform the market going forward.

It doesn't get much better than that. No wonder U.S. Micro Cap has outdistanced the S&P 500 by more than six percentage points annually over the last decade.

For me, it often helps to see what superior stock pickers are buying. If that describes you, too, then consider Champion Funds. Shannon Zimmerman's picks are up 13% on their respective benchmarks as I write. Check out the entire portfolio with a free, no-risk trial.

That's all for now. See you back here next week, when we once again look at the funds behind the fantasy.

Still hungry for stock ideas? Stop by CAPS and get your fill, 100% free.

Fool contributor Tim Beyers, who is ranked 6,373 out of more than 30,200 rated investors in CAPS, didn't own shares in any of the companies mentioned in this article at the time of publication. Tim's portfolio holdings can be found at his Fool profile. His thoughts on funds, Foolishness, and investing in general may be found in his blog. The Motley Fool's disclosure policy has recurring fantasies about a desert island, margaritas, and a plate of burritos. Go figure.