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:

Company

Last Closing Price

CAPS Rating (Out of 5)

CE Franklin

$9.78

*****

BioSante Pharmaceuticals

$4.09

**

QLT

$3.90

*

Palm Harbor Homes

$7.01

*

AbitibiBowater (NYSE:ABH)

$10.62

*

Sources: Motley Fool CAPS, Yahoo! Finance.

Energy-services company CE Franklin has few fund fans. But of those who are buyers, a handful are highly rated by Morningstar. One, in particular, has my admiring eye.

Allow me to introduce you to Fidelity Low-Priced Stock (FUND: FLPSX  ) , a no-load winner that, sadly, is closed to new money. That's to be expected. Manager Joel Tillinghast has more than $30 billion in assets to put to work in Low-Priced Stock.

And, oh, has he ever put it to work. Tillinghast, well respected here in Fooldom as a top value investor, has crushed the market over the past five years. Over the past 10, he's pummeled the S&P 500 by more than 7 percentage points annually and category peers by 4 points a year. Talk about impressive!

Here's a look at the top five stocks Tillinghast owns today:

Company

Last Closing Price

CAPS Rating (Out of 5)

Petrobras (NYSE:PBR)

$125.49

*****

Bed Bath & Beyond (NASDAQ:BBBY)

$30.87

***

Safeway (NYSE:SWY)

$27.83

**

Oracle (NASDAQ:ORCL)

$21.20

****

D.R. Horton (NYSE:DHI)

$16.24

*

Sources: Morningstar, Motley Fool CAPS.

I like this portfolio for its balance. Fools know that Oracle is a favorite of mine -- and a stock I own -- but I find the arguments for Brazilian energy conglomerate Petrobras nearly as compelling. Foolish colleague James Early best expressed them in the pages of Motley Fool Income Investor, I think: "The company's lingering monopoly benefits give it a near lockdown in Brazil. That's reason enough to own the stock, but as Brazil makes the transition from net importer to net exporter of oil, Petrobras' massive reserves, deep-water drilling expertise, and heavy-oil refining investments will leave dividend investors fat and happy -- with a growing 2.7% yield and 47% capital appreciation potential, to boot."

To be fair, James wrote those words about 80% ago. Does Petrobras still have room to grow? That's a tougher question to answer. Tillinghast cut a portion of his stake most recently. Others, including CAPS investor zo6racer, see deteriorating macroeconomic conditions here and figure it's time to go abroad.  Quoting from a pitch our Fool made in February:

This company is not [geared] to the U.S. economy and is continuing to drill for oil. It is also backed very much by Ken Heebner @ CGM Focus Fund (which had a nice 70% return last year). I think [Petrobras] is going to outperform the market over the next year or so.

True, Heebner is buying. And while Tillinghast isn't, I'd bet good money that he wouldn't keep Petrobras as his top holding if he thought the shares were due for a fall. Thus, I sense that zo6racer has it right: Petrobras still has room to run.

But that's my take. What's yours? Would you own Petrobras, or any of the stocks in Tillinghast's portfolio, at today's prices? Log in to CAPS today, and let us know what you think. It's 100% free to participate.


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