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)

Jabil Circuit (NYSE: JBL  )

$16.15

***

Hilb, Rogal & Hobbs

$43.80

**

Fuel Systems Solutions (Nasdaq: FSYS  )

$28.37

**

HireRight

$17.40

**

MEDecision

$6.59

**

Sources: Motley Fool CAPS, Yahoo! Finance.

Jabil Circuit has plenty of fund fans, many of which are highly rated. But only two get five stars from ratings agency Morningstar: Vanguard Capital Opportunity (VHCOX) and Presidio (PRSDX).

Both are excellent funds. Vanguard's top trio -- Howard Schow, Joel Fried, and Theo Kolokotrones -- should have a place in the investing hall of fame for their two decades of 15% average annual returns leading Vanguard PRIMECAP (VPMCX).

But today I'm going with the kid: Kevin O'Boyle of the no-load Presidio fund, which opened for business in 2005. Yet O'Boyle isn't new at the investing game. He co-managed the market-beating Meridian Value (MVALX) fund with Rick Aster for close to a decade. Presidio applies similar principles but is small enough to pick up unloved small-caps, much as Bill Mann and Seth Jayson do for Motley Fool Hidden Gems subscribers.

Here are the top five stocks O'Boyle holds as of this writing:

Company

Last closing price

CAPS rating (out of 5)

Advance Auto Parts (NYSE: AAP  )

$37.93

****

Avid Technology (Nasdaq: AVID  )

$17.23

*

News Corp. (NYSE: NWS  )

$14.63

***

Cardinal Health (NYSE: CAH  )

$50.64

***

Faro Technologies (Nasdaq: FARO  )

$23.77

****

Sources: Morningstar, Motley Fool CAPS.

There are some interesting choices here. News Corp. is a rarity in media -- a profit machine. Normalized net income is up more than 17% a year over the last three, according to Capital IQ.

Cardinal Health, meanwhile, is in recovery. CAPS investor PennyPincher12 sees it as a sustainable business. "Great fundamentals and valuations," our Fool wrote in early June. "I work in the biotech industry and we use a lot of their products. Most of their products are disposable and a lot of times only used for hours or minutes. They are a cash cow."

Yet my favorite of O'Boyle's picks is Advance Auto Parts. I can't ignore the insiders. Two of the company's top executives spent more than $4 million to acquire shares at prices very near what you'd pay today.

I also like when top investors agree with other top investors. Credit Suisse, one of the highest-rated analysts in our CAPS database, upgraded shares of Advanced Auto just last month, arguing that its strategy to boost do-it-yourself sales will lead to higher returns for investors.

Agreed, but I'm more interested in what you think. Would you own Advance Auto Parts, or any of the stocks in the Presidio fund, at today's prices? Log into CAPS today and let us know what you think. It's 100% free to participate.

If you like seeing what superior stock pickers are buying, consider Motley Fool Champion Funds. Its collection of market beaters is up 18% on their respective benchmarks as of this writing. Examine the entire portfolio with a free, no-risk trial.

Fool contributor Tim Beyers, ranked 20,208 out of more than 110,000 participants in CAPS, didn't own shares in any of the companies mentioned in this article at the time of publication. See Tim's portfolio and his latest blog commentary. The Fool's disclosure policy has recurring fantasies about a desert island, margaritas, and a plate of burritos. Go figure.


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