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)

Ascent Solar

$16.05

***

Solarfun (NASDAQ:SOLF)

$13.90

***

First Solar (NASDAQ:FSLR)

$288.24

**

Trina Solar

$41.96

**

Canadian Solar

$25.98

**

Sources: Motley Fool CAPS, Yahoo! Finance.

Today's list might make you think George Harrison was serenading Wall Street with The Beatles' 1969 hit "Here Comes the Sun." Our five solar stocks here all have plenty of fund fans. But I'll focus on First Solar, which was one of the best stocks of 2007. Several five-star funds have bought shares in recent months. Only one really intrigues me, though.

Let's revisit Leuthold Core Investment (FUND: LCORX  ) , a no-load winner that closed to new money shortly after it became part of the Champion Funds portfolio more than three years ago. Investors who bought at the time have since doubled their money.

So it is sometimes when investing alongside superior investors such as Steve Leuthold. He and his team at Core Investment have outdistanced category peers by almost 10 percentage points annually over the past five years. Leuthold also called the start of the great bull market that began in 1982, foresaw the market crash of 1987, and pegged the market bottom in October 2002.

Sign me up. Here's a look at the top five stocks Leuthold owns today:

Company

Last Closing Price

CAPS Rating (Out of 5)

Wal-Mart   (NYSE:WMT)

$57.65

***

Transocean (NYSE:RIG)

$154.73

*****

Pride International

$43.80

*****

Noble (NYSE:NE)

$58.88

*****

Joy Global (NASDAQ:JOYG)

$75.69

*****

Sources: Morningstar, Motley Fool CAPS.

Talk about an impressive portfolio. First, five-star stocks very often are outperformers. But Leuthold's done more than emphasize likely winners. He's betting on cheap winners. Stocks such as Transocean and Noble, whose PEG ratios check in at a measly 0.35 and 0.46, respectively, based on 2008 projected earnings.

Nevertheless, I favor mining-equipment maker Joy Global the most from this group. CAPS investor mathieugp best explained why, in this pitch from last month:

This is surely a good company if you want to profit from the increase of production of copper and oil sands, two very profitable commodities to extract right now. Companies that extract those two commodities will need more equipment because they will want to get their resources on the market ASAP to profit [from] high prices. They will also need services for [repairs] and annual check-up[s] on that equipment. ... Joy Global offers these services.

Seems prescient, doesn't it? Oil prices once again rose to record levels earlier today and remain poised to pass the $120-per-barrel threshold. Joy Global, meanwhile, continues to enjoy rising margins, north of 25% returns on capital, and a very reasonable 1.27 PEG.

But that's my take. What's yours? Would you own Joy Global, or any of the stocks in Leuthold'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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