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)

iCAD

$4.22

*****

NPS Pharmaceuticals

$8.77

*

R.H. Donnelley (NYSE: RHD  )

$3.38

**

FirstFed Financial (NYSE: FED  )

$12.75

*

Star Scientific

$3.67

*

Sources: Motley Fool CAPS, Yahoo! Finance.

Former top growth stock iCAD has a small but committed fund following, including one of my favorites: TFS Market Neutral (TFSMX). Even so, I think it's time I introduced you to another no-load winner, ING FMR Diversified Mid Cap (IFDSX).

Thomas Allen leads this five-star fund, a job he's had since February 2004. You'd be hard-pressed to find a better stock picker. Only once -- last year -- has Allen lost to category peers. And even then, Diversified Mid Cap returned 14.5% to its shareholders, well above the average return of the S&P 500.

Here's a look at the top five stocks Allen holds as of this writing:

Company

Last closing price

CAPS rating (out of 5)

Newmont Mining (NYSE: NEM  )

$39.54

***

Barrick Gold (NYSE: ABX  )

$30.57

***

Juniper Networks (Nasdaq: JNPR  )

$23.60

***

Weatherford Int'l (NYSE: WFT  )

$33.68

****

AGCO Corp. (NYSE: AG  )

$53.42

***

Sources: Morningstar, Motley Fool CAPS.

Of these, I like Newmont Mining. Here's CAPS investor Jonorski, who explained the thesis in March:

Newmont is a well managed producer, lower cost, expansion minded (by acquistion and add'l mines) with reserves to keep them busy, and new mines coming on line. They have very little leverage to hurt them (future sales)(unlike ABX). This is a rainy day stock.

A rainy-day stock that's seeing sunny returns on invested capital: ROIC during the June quarter reached 6.1%, up from 4.5% a year ago. What's more, analysts estimate 13.9% bottom-line growth over the next five years, which results in what I consider to be a very reasonable 1.12 PEG ratio. So long as commodity prices don't suddenly collapse, I see Newmont's shares heading north.

But that's my take. I'm more interested in what you think. Would you own shares of Newmont Mining or any of the stocks in the ING FMR Diversified Mid Cap 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 17% on their respective benchmarks as of this writing. Examine the entire portfolio with a free, no-risk trial.

Fool contributor Tim Beyers, who is ranked 19,296 out of more than 115,000 participants in CAPS, didn't own shares in any of the companies mentioned in this article at the time of publication. Get access to all of his Foolish writings here. The Motley Fool's disclosure policy has recurring fantasies about a desert island, margaritas, and a plate of burritos.


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