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:

Company

Currently Fetching

CAPS Rating (out of 5)

Sierra Wireless

$24.97

****

KMG Chemicals

$24.03

****

China Medical

$32.46

****

American Technical Ceramics

$23.85

****

CF Industries

$60.00

***

Lindsay Corporation

$43.35

***

Orbcomm

$16.82

*

Sources: Motley Fool CAPS, Yahoo! Finance

List-topper Sierra Wireless, which makes -- surprise! -- wireless modems, has plenty of fund fans, including:

  • BlackRock Global Technology A (MDGTX), which hasn't had a winning year since 2003 and, to add insult to portfolio injury, charges a 5.25% front-end load.
  • American Century Veedot (AMVIX), a no-load growth fund that has outdistanced the S&P 500 by more than 10 percentage points so far this year.
  • American Century Technology (ATCIX), which hasn't had as much luck as its sister fund, lagging the S&P over the last three- and five-year periods.
  • Seligman Global Smaller Companies A (SHGAX), which charges a massive 1.82% expense ratio on top of a 4.75% front-end load. Sheesh. No wonder this fund has lost to the S&P by more than two percentage points a year since 1997.
  • Oberweis Mid-Cap (OBMDX), which hasn't attracted much investment in its 11 years of existence. Oberweis commands just $11 million in assets, according to Morningstar.

Of these funds, it's American Century Veedot that interests me most, and not just for its funny name. Here are its top five stock positions:

Company

Currently Fetching

CAPS Rating

WellCare Health (NYSE:WCG)

$92.01

***

InterContinental Exchange (NYSE:ICE)

$149.80

***

DryShips (NASDAQ:DRYS)

$40.41

*

Millicom International (NASDAQ:MICC)

$93.69

****

Nexstar Broadcasting (NASDAQ:NXST)

$13.26

**

Sources: American Century, Motley Fool CAPS

This strikes me as an exceptionally contrarian -- and perhaps dangerous -- portfolio. Consider cargo carrier DryShips. CAPS All-Star ctmedic00 says its one-star rating is well deserved. Quoting: "Among the first vessels DryShips planned to buy with the offering proceeds were six owned by companies controlled by [CEO George] Economou's sister."

Yep, that's pretty bad.

And I'd be concerned if manager John Small Jr., who has been at the helm since 1999, had a poor record. But that's not the case. Veedot is up on the S&P 500 by nearly two percentage points a year since 2002.

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 No. 2,676 out of more than 31,000 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.


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