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?

Here's our latest group of contenders:




CAPS rating

Clean Energy Fuels






Southwest Water



Green Mountain Coffee



Blue Nile



Under Armour






Sources: Motley Fool CAPS, Yahoo! Finance

List-topper Clean Energy Fuels, which has found a way to convert natural gas into a gasoline alternative, has a small but interesting fund following, including:

  • Lord Abbett Developing Growth A (LAGWX), a proven performer that's up on the S&P by more than 15 percentage points thus far during 2007. If only it didn't charge an oppressive 5.75% front-end load;
  • Kalmar Growth-with-Value Small Cap (KGSCX), a no-load fund that claims to invest in small-cap growers that are trading for a discount;
  • Nationwide Growth D (MUIGX), a subpar fund that has marginally lost to the market over the past five years, making its 4.50% front-end load all the more unbearable;
  • and Wilshire Small Company Growth (DTSGX), a tiny no-load fund that has mostly matched the returns of the S&P 500 over the past decade.

Of these funds, it's the no-load Kalmar Growth-with-Value fund that interests me most. Here are its top five stock positions:




CAPS rating

MSC Industrial Direct (NYSE:MSM)



Chicago Bridge & Iron (NYSE:CBI)



Ultra Petroleum (NYSE:UPL)






Respironics (NASDAQ:RESP)



Sources: Morningstar, Motley Fool CAPS

This strikes me as an excellent portfolio. Consider Chicago Bridge & Iron. As tragic events in Minnesota sadly illustrate, its engineering expertise has never been needed more. And its forward P/E of 16 seems perfectly reasonable to me.

CAPS player dennyr3 also likes the stock, but for different reasons. Quoting from his pitch:

It will outperform over the next 5 years consistently due to great management. I was taken on a tour of their new offices at Edison Plaza in Beaumont, TX and also the new manufacturing facility on the "Island" in the Beaumont port. They are aggressively hiring due to their backlog, and their new shops on the "Island" will be full by the end of the year. The engineering manager at the Beaumont facility is first-rate. Overall this is a very successful arm of the company.

Getting great management on the cheap is about as good as the stock market offers. Kalmar's triumphant trio -- Ford Draper Jr., Dana Walker, and Gregory Hartley -- seem to have found plenty such opportunities in 10 years of market-beating performance.

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 by 13 percentage points 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.

Blue Nile and Under Armour are Motley Fool Rule Breakers picks. Blue Nile is also a Motley Fool Hidden Gems recommendation.

Fool contributor Tim Beyers, who is ranked 6,335 out of more than 60,000 participants in CAPS, didn't own shares in any of the companies mentioned in this article at the time of publication. Find Tim's portfolio here and his latest blog commentary here. The Fool's disclosure policy has recurring fantasies about a desert island, margaritas, and a plate of burritos. Go figure.

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