Invest Like a Pro: Fidelity

Imitation is the best form of flattery, right? Well, when you're learning a new skill, imitation can also be a great way to hone your craft.

If you're learning guitar, you might pick up a book of Jimi Hendrix's licks or download the chords to a couple of Bob Dylan's songs. So when you're trying to become a better investor, it only makes sense to take a peek at what the professional investors are up to.

For the Fools who don't have the time or inclination to pick individual stocks on their own, Shannon Zimmerman at The Fool's Champion Funds newsletter has put together a collection of mutual funds that have collectively outperformed their benchmarks by 14.2%. For the rest of us, we can tune in directly to what some of the major funds are holding.

You see, the SEC requires institutional investment managers who manage $100 million or more to show their holdings via quarterly 13-F filings. So this week, I dug up Fidelity's holdings -- and, to make things even more interesting, I cross-referenced its holdings against what players in the Fool's CAPS community had to say about the stocks.

Below are five of Fidelity's larger holdings that have also been highly rated by CAPS players.

Now before you jump to it and make any hasty moves, remember that we're looking at what Fidelity has done in retrospect. For all we know, since its last 13-F filing, the company has drastically reduced its holdings in any or all of the above stocks. With that in mind, here are some thoughts on a couple of these stocks to kick off further research.

Ain't no sunshine when Hank's gone?
Some may know American International Group primarily because of the high-profile attacks on the insurance industry by New York's flamboyant former Attorney General Elliot Spitzer and the related departure of longtime exec Maurice "Hank" Greenberg. But it's important not to overlook the success the company has had. Over the past 10 years, AIG has managed to grow net income at an average of 17% per year -- pretty impressive for a company that was already doing nearly $3 billion in net income in 1996.

AIG is a massive insurance and finance operation, providing a wide variety of insurance products and financial services to commercial and retail customers. Among its operations are general insurance, which issues an assortment of property and casualty insurance, including auto insurance through 21st Century Insurance (NYSE:TW); life insurance and retirement products; reinsurance; and non-insurance financial services, which include aircraft leasing, capital markets activities, and consumer financial services. AIG has been aggressive about moving into foreign countries, and gets a significant amount of its premiums outside the United States.

On CAPS, the stock has 746 outperform ratings versus just 24 underperform ratings. Though CAPS All-Star wutangfinancial claims to have given AIG the thumbs-up as a "defensive pick," others like the growth prospects for the company. BillMcNeal shares:

[AIG is a] well-diversified holding company, with a huge business in insurance domestically and worldwide, where it has a growing business. Think Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) without the Buffett premium. [Its] expanding presences in insurance markets around the world will contribute to significant earnings growth in the near future. [The] share price will follow.

You need equipment to find new oil
You don't really need much more than some common sense to understand the basic economics of oil right now. The supply of oil is fairly constrained while demand continues to grow, so prices have been driven upward. High prices, in turn, encourage further oil exploration, since the oil producers would like to capitalize on the high prices.

To carry out exploration activities, drill new wells, and the like, all of these companies end up shelling out more money for capital equipment. This capital spending ends up right in the pockets of equipment and service providers like National Oilwell Varco. The company has gotten significantly larger in the past few years, in part thanks to the acquisition of Varco International in 2005. Going forward, analysts are expecting the company to continue to grow its earnings per share at a rate in the upper 20s over the next five years.

On CAPS, spikenail points out that in order for oil companies to drill offshore, they're going to need to build oil platforms -- which would likely benefit NOV. Meanwhile, TheGarcipian notes the company's nice profit margins, return on equity and assets, strong growth rates, relatively low debt, and high cash flows. He calls NOV "a winner all around!"

Eager to read more commentary from the CAPS community on these Fidelity-owned stocks? Hop on over to CAPS and start interacting with the other 30,000-plus CAPS players. While you're checking out these stocks, you can also find out more about the 4,600 other stocks that are currently rated on CAPS.

More CAPS Foolishness:

• 3 More Kings of Cash
• Stocks of the Week
• 5 Dynamic Dividend Stocks

Berkshire Hathaway is a selection of both Stock Advisor and Inside Value. You can check out either newsletter with a 30-day free trial.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. Though it may not invest like a pro, the Fool's disclosure policy plays pool like a pro. It is the only non-Wookiee to ever be named the Kashyyyk billiards champion.