Welcome, Fools, to part 56 of our several-thousand-part series, "Better Know a Stock Picker," which is loosely, but not too loosely, based on Stephen Colbert's "Better Know a District" from The Colbert Report.
Like Stephen and his thorough investigations into America's congressional districts, each week I take a look at a fund you may want to own. What's on tap this week?
|
Fidelity Small Cap Stock (FSLCX) |
|
|---|---|
|
Expense ratio |
0.96% |
|
Fund size |
$4.86 billion |
|
1-year return |
17.80% |
|
5-year return |
17.06% |
|
10-year return |
N/A |
Top 5 stock holdings
|
Company |
Percent of Assets |
|---|---|
|
Cerner |
3.59% |
|
Vestas Wind Systems |
2.18% |
|
Avnet |
1.54% |
|
Arrow Electronics |
1.43% |
|
Pharmaceutical Product |
1.33% |
Meet Paul Antico
The fightin' team at Fidelity Small Cap Stock is led by Paul Antico, who was recruited out of the Massachusetts Institute of Technology in 1991 to be a Fido analyst. He landed the top job at Small Cap Stock seven years later, in December 1998.
And he's put up a gutly performance in the nine years since. Witness the past 12 months. Antico beat the benchmark Russell 2000 by more than six percentage points in the year ended March 31.
No surprises there. Antico possesses superstantial valuation skills, honed while still a student at MIT. There, his subject was -- wait for it -- baseball cards. Antico found that the cards of minority players would lag their non-minority peers in price appreciation, but only after retiring from the game.
Recruiters at Fidelity were intrigued. "Everyone kept going back to the damn baseball cards -- how did I decide which to buy and sell,'' Antico told Bloomberg News in a 2004 interview.
How he invests
Talk about a smart interview strategy. Antico's buy-sell discipline as a hobbyist would come to mirror his stock-picking strategy, which today refuses to be boxed in by the growth vs. value mirage.
Consider Small Cap Stock's eclectic portfolio. Recent buys include reasonably priced NATCO
But Antico's real thirst is for undiscovered stocks, which he searches for using Fido's vast analyst network. That's what led him in 2002 to Actelion, a Swiss pharmaceutical company, Antico told Bloomberg.
At the time, a London-based analyst had found that the firm's newest drug, Tracleer, was seeing results in treating pulmonary hypertension. Antico sensed an opportunity and commissioned a research firm to survey doctors about the drug. He bought after receiving a stream of positive reports. Actelion's stock would double within two years.
Eat that, Wall Street.
Is this fund for you?
There's a lot to like about Fidelity Small Cap Stock. Trouble is, you can't buy it. Fido shut the doors on new money last summer. Disappointed? Me too. But I also delight in the irony. Back in 2001, Antico told reporters that he wanted Small Cap Stock to be "the biggest small-cap fund in the country." Oh, well.
As for small caps in general, the Street says that large caps are a better bet. Maybe, but there's never a good time to abandon small caps completely. A better strategy is to side with the best small-cap managers, as Shannon Zimmerman has in constructing the Motley Fool Champion Funds portfolio. More than 72% of his picks are beating their respective benchmarks as of this writing. Intrigued? Accept a 30-day free pass to the service.
And till next time, fund nation, good night.
For more Foolish coverage of small-cap superstars:
- Greg McCrickard takes volatility to task in hunting for small-cap bargains.
- Joel Tillinghast, too, likes his stocks small and cheap.
- Chuck Royce is the original small-cap superstar.
