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 ... and how does their judgment compare with that of our Motley Fool CAPS community?

Here's our latest group of contenders:


Last Closing Price

CAPS Rating (Out of 5)

Harbin Electric



Leap Wireless



China Sunergy



PFF Bancorp



Pacific Ethanol



Sources: Motley Fool CAPS, Yahoo! Finance.

Chinese motor maker Harbin Electric has few fund fans, only one of which is highly rated by Morningstar. The other comes from a fund family that's treated me well. Allow me to introduce you:

  • TFS Market Neutral (TFSMX), a two-time guest here whose hedging strategies have proven effective with this year's turbulent market. Market Neutral is up substantially on both its category peers and the S&P 500 in 2007. Perhaps that'll attract enough investment to push this $149 million fund into the billion-dollar big leagues?
  • Julius Baer U.S. Microcap A (JMCAX), a no-load cousin to Julius Baer International Equity (BJBIX) which has delivered outsized returns to my portfolio since 2003. Microcap, launched last summer, has yet to enjoy similar success. But I suspect it's only a matter of time before new manager Samuel Dedio absorbs some of the market-beating mojo displayed by colleagues Richard Pell and Rudolph-Riad Younes.

Let's dig into Dedio's picks. Presenting the top five stocks held by Julius Baer U.S. Microcap:


Last Closing Price

CAPS Rating (Out of 5)




optionsXpress (NASDAQ:OXPS)



Netezza (NYSE:NZ)









Sources: Morningstar, Motley Fool CAPS.

This strikes me as a strong portfolio. Take SPSS, which provides the sort of analytics software that got Applix acquired by Cognos. That company, in turn, was bought by IBM (NYSE: IBM  ) for $5 billion.

Analytics are big business for two reasons. First, business moves faster today than it ever has, which makes measuring progress very important. Second, firms tend to do better when they venture beyond measuring progress, and start using data to predict outcomes. Case in point: Lloyds TSB (NYSE: LYG  ) , which has saved at least $3.5 million by using SPSS to proactively detect fraudulent credit card transactions.

Lloyds isn't alone. CAPS All-Star PearlandTX, a proclaimed user of the software, considered the stock a compelling buy two summers ago:

After using their software on various marketing projects, I am very impressed with their product. SPSS is powerful and easy to use. Marketing profession is under increasing pressure to make decisions based on deep analysis ... Most likely scenario is that they will be acquired by an ERP or CRM software firm.

PearlandTX's pick remains open, and it's trounced the S&P 500 by more than 32 percentage points since that pitch was made.

But that's one Fool's take. What's yours? Would you own SPSS or any of the stocks in Julius Baer U.S. Microcap's portfolio at today's prices? Log into CAPS today, and let us know what you think. It's 100% free to participate.

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