The Stocks the Funds Are Buying

We all know which stocks have made Wall Street's buy list. What I want to know -- and I'm guessing you do, too -- is who's doing the buying. Which funds are buying Wall Street's most popular stocks this week ... and how does their judgment compare with that of our Motley Fool CAPS community?

Here's our latest group of contenders:

Company

Currently
Fetching

CAPS Rating

Ebix

$51.19

*****

Blue Coat Systems

$83.89

***

Chipotle

$100.55

****

Acme Packet

$14.44

****

FARO Technologies

$38.34

****

Tercica

$6.75

***

USB Holding

$23.45

*

Sources: Motley Fool CAPS, Yahoo! Finance

List-topper Ebix, which provides Internet services to the insurance industry, doesn't have much of a fund following. But second-stringer Blue Coat, a data security specialist, does. Here's a sampling:

  • UBS U.S. Small Cap Growth Y (BISCX), a tiny institutional fund that will celebrate its 10th anniversary -- 10 years of market-beating performance -- on Saturday.
  • Allianz CCM Emerging Companies (PMCIX), a closed fund that, under the guidance of top manager William Bannick, has outdistanced the S&P 500 by more three percentage points annually over the past decade.
  • STI Classic Small Cap Growth Stock I (SSCTX), a decent no-load fund that badly lagged its category peers last year but is showing signs of a recovery in 2007.
  • Principal Investors SmallCap Growth Fund II Institutional (PSIIX), a fund meant for large clients with big wallets that has the unfortunate distinction of having started on Dec. 6, 2000. It has returned just 0.86% since. Ouch.
  • Putnam Small Cap Growth A (PNSAX), which is up on the S&P 500 by roughly five percentage points since 2002, thanks to the guidance of manager Richard Weed, who took the helm in April of that year. Too bad the fund charges an oppressive 5.25% front-end load.

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

Company

Currently Fetching

CAPS Rating

Deckers Outdoor (NASDAQ:DECK)

$9.97

**

Zoltek Companies (NASDAQ:ZOLT)

$40.06

***

Tempur-Pedic International (NYSE:TPX)

$28.97

****

IHS (NYSE:IHS)

$50.92

***

Immucor (NASDAQ:BLUD)

$32.78

*****

Sources: Morningstar, Motley Fool CAPS

This strikes me as a strong portfolio. Consider Immucor, which makes products that aid in blood transfusions. Pricing power had led to higher margins and a greater following among investors.

As a dyed-in-the-wool growth grabber, I'm attracted to Immucor's huge and rapidly increasing returns on equity and capital. Others, such as CAPS All-Star 8obrown, simply say the stock is cheap. Quoting from his pitch: "[Immucor is] trading at 61% of intrinsic value."

When growth and value collide, huge returns often follow. STI's new managers -- Chris Guinther, James Foster, and Michael Sansoterra -- surely recognize that.

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 12% 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, ranked 8,324 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. Chipotle is recommended in both Motley Fool Hidden Gems and Rule Breakers. The Fool's disclosure policy has recurring fantasies about a desert island, margaritas, and a plate of burritos. Go figure.


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