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 list of contenders:

Company

Currently Fetching

CAPS rating

Sun Hydraulics

$44.34

*****

Astronics

$26.97

****

Alcan

$83.45

***

China Southern Airlines

$28.26

***

TRC

$13.49

**

Openwave Systems

$8.42

**

Novacea

$11.14

*

Source: Motley Fool CAPS, Yahoo! Finance

List-topper Sun Hydraulics, which makes -- wait for it -- hydraulic equipment, has plenty of fans among the top stock pickers. Here are four funds buying the stock now:

  • Munder Micro-Cap Equity (MMEYX), which has pounded the S&P by more than six percentage points annually since 2002, when current manager John Richardson took over.
  • Royce Special Equity (RYSEX), which has been run by one of my favorite fund managers, Charlie Dreifus, since 1998. Special Equity also happens to be one of advisor Shannon Zimmerman's winning picks for Motley Fool Champion Funds.
  • Nicholas-Applegate U.S. Micro Cap (NAMCX), which has delivered market-crushing performance over the past five years for its institutional clients, from whom it requires a massive $250,000 minimum initial investment.
  • Schwartz Value (RCMFX), which has been managed by bargain-hunter George Schwartz since 1983. His strategy? Buy undervalued companies that Wall Street ignores, a la our Hidden Gems small cap stock service.

Of these funds, it's Schwartz Value that interests me most. Here are its top five stock positions:

Company

Currently

Fetching

CAPS rating

Gentex Corp. (NASDAQ:GNTX)

$17.24

**

Zebra Tech. (NASDAQ:ZBRA)

$41.21

***

Lifetime Brands (NASDAQ:LCUT)

$20.81

*****

Input/Output (NYSE:IO)

$15.86

****

Waters Corp. (NYSE:WAT)

$61.00

*****

Source: Morningstar, Motley Fool CAPS, Yahoo! Finance

This strikes me as a very strong, if conservative, portfolio. Consider Lifetime Brands, which markets kitchenware under the names Kitchen Aid and Cuisinart, among others. CAPS All-Star KempInTheWoods explains the thesis:

Solid (if mundane) product line, stock has taken one of its periodic poundings, leaving forward P/E at 10. Good market position, solid management (30% insider ownership), great [year-over-year] growth. What's not to like?

Not much, from what I can tell. And I'm more than a little persuaded by Schwartz's 10-year average return, which is up on the S&P 500 by better than 2.5 percentage points over the same period.

For me, it often helps to see what superior stock pickers are buying. If that describes you, too, then consider Champion Funds. Shannon's picks are up more than 14% on their respective benchmarks. 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 2,442 out of more than 29,700 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.


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