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

KongZhong

$7.87

***

China BAK Battery

$8.13

***

China Sunergy

$11.38

***

Network Equipment Technologies

$14.85

***

Alabama National Banc

$78.20

***

Baidu.com

$324.05

***

Sources: Motley Fool CAPS, Yahoo! Finance.

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:

Company

Currently
Fetching

CAPS Rating

Dynamic Materials (NASDAQ:BOOM)

****

$48.63

Diodes (NASDAQ:DIOD)

****

$34.09

Andersons (NASDAQ:ANDE)

**

$47.20

Smith & Wesson (NASDAQ:SWHC)

****

$19.16

Air Methods (NASDAQ:AIRM)

****

$51.21

Sources: Morningstar, Motley Fool CAPS.

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.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 538041, ~/Articles/ArticleHandler.aspx, 12/22/2014 4:14:39 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement