At the end of the fourth quarter, mutual funds filed their holdings with the SEC and in turn enabled the public to see the stocks that fund managers held in their portfolios. Examining the investment themes of professionals can assist less experienced investors in seeking out new investment holdings. By poring over the holdings, we picked out four stocks money managers love. Can you learn to love them too?

IN PICTURES: How To Make Your First $1 Million



The Price Is Right


  • Fund:

CGM Focus Fund (CGMFX)

Manager: Ken HeebnerInteresting Fact: The fund has beat 95% of similarly structured funds.New Stake: Priceline.com (Nasdaq:PCLN)

Heebner established a new stake in Priceline.com during Q4. Given the high rate of turnover of CGMFX, this position may have been stabled as a short-term play. In any event, this stock has risen more than 200% over the past year and has been trending upward. Analysts are predicting 30.5% sales growth from Priceline.com for its Q4 results, which will be followed by more than 20% quarterly compounded growth for the next nine months.



Freshly Brewed

  • Fund: Brown Capital Management Small Company Fund (BCSIX)
  • Managers: Keith Lee, Robert Hall, Kempton Ingersol and Amy Zhang
  • Interesting Fact: The fund outperformed small growth funds tracked by Morningstar by double-digit percentage points in three of the last three years.
  • One of Top Equity Holdings as of December 31: Green Mountain Coffee Roasters (Nasdaq:GMCR)

Green Mountain has been a long-term holding of BCSIX. With an annual portfolio turnover rate of 8%, investors can bank on GMCR remaining in the Small Company Fund portfolio for the long haul. In its most recent quarter, Green Mountain saw its sales increase by 77% compared to the first quarter in 2009.

Credit Worthy

  • Fund: Neuberger Berman Partners Fund (NPRTX)
  • Manager: S. Basu Mullick
  • Interesting Fact: The fund returned 56.1% last year compared to 29.6% by large blend funds tracked by Morningstar in 2009.
  • Top Holding as of December 31: Bank of America (NYSE:BAC)

Now that Bank of America has repaid its $45 billion TARP loan, the company is hoping that the focus will shift to the organic growth of its retail banking business. Earlier this week, the company said that late credit card payments fell to the lowest level in a year. This trend could be a sign that consumers are continuing to regain their footing on a macroeconomic level.

Fuel for the Fire

  • Fund: Auer Growth Fund (AUERX)
  • Managers: Bob Auer and Bryan Auer
  • Interesting Fact: Auer is a relatively new fund that was launched in 2008 by the father-son team returned 36.5% in 2009
  • Top Holding as of December 31: James River Coal Company (Nasdaq:JRCC)

In Q3, James River swung to a profit of 36 cents per share from a loss of 86 cents in the company's Q3 in 2008. The company has benefited from the stabilization of coal prices as well as a decrease in the company's cost per ton of coal sold. Production was down in Q3 from a year-ago, but the pullback may only be temporary.

Bottom Line
The top holdings or new positions taken by successful mutual fund managers can serve as a good starting point for investors evaluating alternatives for putting their cash to use. It is important to keep in mind the time lag between year-end and the date of disclosure. For mutual funds with high rates of turnover, implementing a strategy whereby investors mimic professional portfolios may be challenging to accomplish. (We break down the key components of analyzing a fund manager's performance so you can find a winner. To learn more, see Choose A Fund With A Winning Manager.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Mutual Funds & ETFs

    Top 5 Japan Mutual Funds

    Discover five of the most popular and best-performing mutual funds offering investors direct exposure to equities of Japanese companies.
  2. Mutual Funds & ETFs

    5 Mutual Funds that Hold Berkshire Hathaway Stock

    Discover the top five mutual funds most heavily weighted with Berkshire Hathaway stock, and the percentage of their assets dedicated to BRK.
  3. Mutual Funds & ETFs

    3 Mutual Funds that Hold Google Stock

    Discover the top three mutual funds that dedicate the largest percentage of their total assets to Google, Inc. stock.
  4. Mutual Funds & ETFs

    Comparing ETFs Vs. Mutual Funds For Tax Efficiency

    Explore a comparison of mutual funds and exchange-traded funds, or ETFs, and learn what makes ETFs a significantly more tax-efficient investment.
  5. Mutual Funds & ETFs

    4 Mutual Funds that Hold Tesla Stock

    Obtain information on the four mutual funds that have significant allocations to Tesla Motors, Inc. in their major portfolio holdings.
  6. Mutual Funds & ETFs

    4 Mutual Funds that Hold Apple Stock

    Discover mutual funds offering the most substantial percentage of holdings in Apple, Inc. stock that investors can use to get significant exposure to Apple.
  7. Mutual Funds & ETFs

    ETF Analysis: Vanguard Small-Cap Value

    Find out about the Vanguard Small-Cap Value ETF, and explore detailed analysis of its characteristics, suitability, recommendations and historical statistics.
  8. Mutual Funds & ETFs

    Top 3 Switzerland ETFs

    Explore detailed analysis and information of the top three Swiss exchange-traded funds that offer exposure to the Swiss equities market.
  9. Stock Analysis

    Net Neutrality: Pros and Cons

    The fight over net neutrality has become an amazing spectacle. But at its core, it's yet another skirmish in cable television's war to remain relevant.
  10. Mutual Funds & ETFs

    Top 5 Chinese Mutual Funds

    Learn about some of the most popular and best performing mutual funds that offer investors exposure to the important emerging market economy of China.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth ...
  4. Return On Investment - ROI

    A performance measure used to evaluate the efficiency of an investment ...
  5. Systematic Manager

    A manager who adjusts a portfolio’s long and short-term positions ...
  6. Unconstrained Investing

    An investment style that does not require a fund or portfolio ...
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  5. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  6. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!