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:

List-topper KongZhong, a provider of interactive games and entertainment for China's mobile phone users, doesn't have much of a fund following. But Network Equipment, which makes -- wait for it -- equipment for voice and data networks, has plenty of fund fans. Here's a sampling:

• Oppenheimer Main St. Small Cap A (OPMSX), an average fund that has failed to outperform its Morningstar peer group over the past five years. A 5.75% front-end load isn't all that impressive, either.
• Bjurman, Barry Micro-Cap Growth (BMCFX), a four-star fund that's been on a losing streak lately.
• Bridgeway Ultra-Small Company (BRSIX), which remains one of the 10 best funds of the past decade and a two-time alumni of this column. (Look back at its appearances in July and September if you're interested.)
• AFBA Five Star Small Cap A (AFCAX), which sports a brand-new management team but also carries the baggage of a 5.50% front load and a hefty 1.53% expense ratio. Too bad.
• RiverSource Strategic Allocation A (IMRFX), another load fund nearing its five-year anniversary. It's been pretty good in that time. RiverSource's team is up on the S&P by more than 5% so far this year and by more than 2% annually since 2004.

Of these funds, it's Bjurman, Barry Micro-Cap Growth, which Morningstar ranks in the top 1% of small growth funds over the past decade, that interests me most. Here are its top five stock positions:

This strikes me as a strong, if risky, portfolio. Consider Dynamic Materials, which uses explosives to bind metals that can't be welded any other way. Returns on equity and capital exceed 30%, which is exceptional.

So, too, is growth. Revenue is up 33% over the trailing 12 months. Net income improved by nearly 22% over the same period. Wall Street expects the pace to slow to 18% this year, which results in a somewhat high 1.43 PEG ratio. But CAPS All-Star rollininclover says excellent returns are still to be had:

This is a basic materials play. ... Balance sheet clean as a whistle, [fundamentals] immaculate. I like this in the long-term as it is still a growth stock.

Bjurman, Barry lead manager O. Thomas Barry, III appears to agree, although he and his team recently sold off some of their position in Dynamic Materials. Proceed with caution.

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 14% 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.