Welcome, Fools, to part 50 (!) of our several-thousand-part series, "Better Know a Stock Picker," which is loosely, but not too loosely, based on Stephen Colbert's "Better Know a District" from The Colbert Report.
Like Stephen and his thorough investigations into America's congressional districts, each week I take a look at a fund you may want to own. What's on tap this week?
|
Fidelity Growth Company (FDGRX) |
|
|---|---|
|
Expense ratio |
0.97% |
|
Fund size |
$32.16 billion |
|
1-year return |
18.62% |
|
5-year return |
13.81% |
|
10-year return |
9.21% |
Top 5 stock holdings
|
Company |
% of Assets |
|---|---|
|
Google |
5.48% |
|
Celgene |
5.30% |
|
Nintendo (Other OTC: NTDOY.PK) |
3.54% |
|
Network Appliance |
2.38% |
|
Wal-Mart |
1.95% |
Meet Steve Wymer
The fightin' team at Fidelity Growth Co. is led by Steve Wymer, who may be the best tech investor operating at Fido. How do I know? Rewind to September 2004. At the time, Growth Company held 1.8 million shares of Google worth $192 million. By November, those totals had grown to 3.6 million and $1.76 billion, respectively.
That's no fluke. Wymer has established a huge 5% lead over the benchmark Russell 3000 growth index over the past decade. He's up more than 2% per year on the S&P 500 over the same period. Eat that, Wall Street.
How he invests
What's the secret of Wymer's superstantial stock market success? Revenue. "The theory is, when revenue is growing, potential is there," he recently told Kiplinger's.
Too true. Some of our biggest winners at Motley Fool Rule Breakers, which is led by Fool co-founder and growth investor David Gardner, racked up huge gains on the top line before becoming multibaggers.
But Wymer doesn't just invest for growth. He carefully considers competitive advantage, too. "I invest in good businesses that will be profitable in the long term," Wymer told Kiplinger's. Among the list are Amylin Pharmaceuticals
But Google may be his best example. DoubleGoo has added market share rapidly in both search and search advertising over the past two years, destroying Yahoo!
Is this fund for you?
Ready to invest with Wymer? Be careful what you say. Wymer's long-term returns are stellar, but during the 2000-2002 bear market, Growth Company crashed like Mickey Rourke's career, down 69% versus a 47% decline for the S&P 500.
There's also diversification to consider. Growth Company isn't a perfect model for a sector fund, yet two-thirds of its assets are invested in tech and biotech. Obviously, Wymer prizes returns over safety.
But that's fine with me. Really, I see only one problem with this fund: it's closed to new investors. Last spring, Wymer, with more than $30 billion to invest, decided that Growth Company didn't need new money.
Disappointed? Fear not, Fool. Motley Fool Champion Funds advisor Shannon Zimmerman is offering a no-strings-attached, 30-day free peek at his portfolio of winners, which are up an average of 15% on their respective benchmarks. Here's how to get started right away.
And till next week, fund nation, good night.
For more Foolish coverage of the growth gurus:
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Modeling is serious business for John Montgomery.
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For Glenn Fogle, mid caps are where it's at.
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Kevin O'Boyle is happy to invest where others won't.
Nintendo and Yahoo! are Stock Advisor picks. Wal-Mart is an Inside Value recommendation.
Fool contributor Tim Beyers is a regular viewer of The Colbert Report. (Stay the course.) Tim 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 Motley Fool's disclosure policy is championship caliber.
