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:

Steel-pipe provider Tenaris has plenty of fund fans, many of which get a high rating from Morningstar. But one, Artisan International Investors (ARTIX), comes from a family of no-load funds that has attracted the bright minds at Motley Fool Champion Funds. Allow me to introduce you.

International Investors is a sister fund to Artisan International Value (ARTKX), which has been a slight laggard since joining the Champion Funds portfolio in the June 2006 issue. Not so with International Investors, a growth fund, which gained 19.7% and 25.6%, respectively, over the past two years.

It's also a long-term winner: Manager Mark Yockey, in his 13th year leading the fund, has outperformed both the benchmark MSCI EAFE and category peers by more than 5 percentage points annually over the past decade.

Here's a look at the top five U.S. exchange-listed stocks in Yockey's portfolio.

Could it be any clearer that Yockey is betting on telecom in the developing world? Spain's Telefonica, for example, has widespread Latin American interests that accounted for 36% of its 2007 revenue. North America's top telcos can't match that diversity, wrote CAPS investor TexasLonghorns last week:

In January, Telefonica upped its existing stake in broadband and fixed-line operator China Netcom from 5% to 7.2%. As China's telecom restructuring effort gets under way, Telefonica's betting that it can provide technology for China Netcom's move into wireless communications. ... The ability to cast such a wide geographical net is one of Telefonica's competitive advantages over American players like Verizon (NYSE: VZ) and AT&T. In fact, Telefonica does less than 40% of its sales in Spain, while Verizon does 97% of its business in the U.S. [Emphasis added.]

That's not exactly right. Verizon reports in its 10-K that 6.4% of its traditional wireline revenue derives from overseas sources. According to Capital IQ, a division of Standard & Poor's, 4.2% of total revenue comes from international operations. Either way, the point remains: As the need for communications services spreads to the furthest reaches of the globe, multinationals such as Telefonica appear best positioned to capitalize.

Or at least that's my guess for how Yockey sees it. But I'm even more interested in what you think. Would you own Telefonica, or any of the U.S.-listed stocks in Artisan International Investors' portfolio, at today's prices? Log in to CAPS today and let us know what you think. It's 100% free to participate.