The Stocks the Funds Are Buying

We already 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)

Vista Gold

$4.66

****

Challenger Energy

$5.38

***

Somanetics (Nasdaq: SMTS  )

$23.72

****

AZZ

$44.07

****

GMX Resources (Nasdaq: GMXR  )

$85.57

****

Sources: Motley Fool CAPS, Yahoo! Finance.

Normally, I'd give Vista Gold top billing here, but because Somanetics is a Motley Fool Hidden Gems Pay Dirt pick, I want to see what funds are following in our team's stock-picking footsteps.

Three of the funds get five stars from ratings agency Morningstar, but only one has caught my eye in this column before: TFS Market Neutral (TFSMX). This no-load winner deserves another mention. While most of us are suffering massive losses, the TFS team is up -- wait for it -- 7.6% year to date. That's what a well-managed long-short fund can do for you.

Here are the top five stocks TFS Market Neutral holds as of this writing:

Company

Last closing price

CAPS rating (out of 5)

Axsys Technologies (Nasdaq: AXYS  )

$56.78

*****

NewMarket Corp. (NYSE: NEU  )

$59.13

****

Wolverine World Wide (NYSE: WWW  )

$23.26

****

Panera Bread (Nasdaq: PNRA  )

$43.95

**

Capstone Turbine (Nasdaq: CPST  )

$3.50

***

Sources: Morningstar, Motley Fool CAPS.

There are some interesting choices here. Panera Bread is a Hidden Gems Pay Dirt pick. (Twice, and twice a market-beater.) Top holding Axsys has been a growth winner. And while Capstone Turbine could be cheap, some investors are concerned there's no bite behind this underdog's bark.

Which leads me to today's favorite: shoe seller Wolverine World Wide. The company recently reported better-than-expected earnings, yet thanks to the rotten economy and the weak dollar, it faces margin-stifling product and freight costs. Investors sold on the news.

But should they have? At least one analyst, Jeff Mintz of Wedbush Morgan Securities, thought Wolverine's failure to raise guidance caused the sell-off. "I think in this environment, with everybody being extremely nervous about the consumer, consumer stocks get quickly punished for whatever they do -- or whatever they don't," Mintz told Forbes.

That was last week. Wolverine's shares have since dropped further; as of this writing, they're trading at what I consider to be a very reasonable 0.82 PEG ratio. Consequently, you'll find Wolverine in my CAPS portfolio.

But that's my take. Would you own Wolverine World Wide, or any of the stocks in the TFS Market Neutral fund, at today's prices? Log into CAPS and let us know what you think. It's 100% free.

Axsys is a Motley Fool Stock Advisor selection. Panera and Somanetics are Motley Fool Hidden Gems Pay Dirt selections. If you like seeing what superior stock pickers are buying, consider Motley Fool Champion Funds. Its collection of market-beaters is up 19 percentage points on their respective benchmarks. Examine the entire portfolio with a free, no-risk trial.

Fool contributor Tim Beyers, who is ranked 21,333 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. Find Tim's portfolio here and his latest blog commentary here. The Fool's disclosure policy has recurring fantasies about a desert island, margaritas, and a plate of burritos. Go figure.


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