04/22/2005 12:00 am EST
By focusing on the Fidelity family of funds, Jim Lowell has developed a noted expertise in assessing buy and sell opportunities among the various funds in the group. Here, the advisor highlights some of his favorite buy-rated Fidelity growth funds.
"At the core of every one of my Buy, Sell, and Hold ratings is my proprietary fund manager ranking system which enables me to strip away all the noise (from the markets, the economies, the pundits), and lets each manager’s numbers speak for themselves. While this has the look and feel of being overly personal, the reality is that it’s just the opposite; a purely quantitative ranking based on the merits of each manager as opposed to a subjective rating system.
"Harry Lange has been running Fidelity Capital Appreciation (FDCAX), a go-anywhere growth fund since the beginning of 1996. His style is simple: growth, value, large-, mid-, and small-cap, with a healthy dose of foreign stocks— like I said, Cap App is truly a go-anywhere fund, and as such, it’s a suitable holding for virtually any growth investor. Currently, Lange is focused on technology, consumer discretionary names, health care, financials, and industrials.
"In a sense, Contrafund (FCNTX) is also go-anywhere, although contrarian manager Will Danoff tends toward large cap stocks and broader diversification. Danoff has been running Contra since September 1990 in his inimitable style— going against the grain to sort the wheat from the crowd’s chaff. Where’s he looking these days? His top five sectors are just what you’d expect from a contrarian: technology, financials, industrials, health care, and consumer discretionary.
"We have just added Value Discovery (FVDFX) to both our Aggressive Growth and Growth portfolios. While Value Discovery is a relatively new fund (launched as it was on 12/02), manager Scott Offen, is a veteran who, at different times, previously managed Select Brokerage, Energy, Food & Ag, Life Insurance, Natural Resources, and Paper & Forest Products over the course of the past 15 years. These days, values might be harder to come by, but Scott’s diversified fund background and consistent value discipline bode well for more profitable discoveries down the road.
"I also upgraded Fidelity Blue Chip Value (FBCVX) this month. Manager Brian Hogan is a relative newcomer (as is this fund); he’s been the manager since the June, 2003 inception. Currently, he’s positioned the top 5 sectors of this fund as follows: Industrials (19.5% vs. 12.5% for his benchmark index, the Russell 1000 Value Index); financials (18.6% vs. 32.6% for his benchmark); energy (12.6% vs. 12.1%); healthcare (10.4% vs. 3.6%); and consumer discretionary (9.2% vs. 10.7%).
"Harris Leviton has been running Value Strategies (FSLSX) for the past 9 years, but it was basically invisible until Fidelity reopened it at the end of January 2004. The fund has shifted from the mid-cap ‘blend’ (midway between value and growth) camp, toward the value side of the balance sheet. While there’s something to be said for style purity, I also have to respect a manager willing to make the kind of outside-the-box bet which proves that he is not willing to accept mediocrity, that he would rather stand out, even at the risk of his career. As it happens, in 2003 Leviton doubled the market’s performance with his smart buys in the bargain basements of technology and consumer discretionaries."