In today's Barron's, investors will find the annual Lipper/Barron's Fund Families Survey. This survey, a pretty comprehensive look at performance of mutual fund families across different asset classes and investment strategies.
This year take-aways:
Growth worked: Those funds that performed best definitely had a bias towards growth.
International exposure: Funds that bought stocks with substantial foreign operations fared better.
Avoiding pitfalls: Underexposure to potential "minefields like major banks, housing companies, and retailers" helped boost performance.
High grade: Those funds that owned highest-quality bonds performed best.
Waddell & Reed (NYSE: WDR) placed first in 2007 betting on companies participating in "major infrastructure plays throughout the world," like Fluor Corp. (NYSE: FLR) and Deere & Co. (NYSE: DE). Check out the Waddell & Reed Dividend Income Fund (WDVAX).
MOST NOTEWORTHY: Eaton Vance (EV), Dover Downs (DDE), Meruelo Maddux (MMPI) and Fifth Third Bancorp (FITB) were today's noteworthy downgrades:
Merrill downgraded shares of Eaton Vance (NYSE: EV) to Sell from Neutral on expectations net flows will slow and pressure shares due to bank loan outflows and closed-end fund sales.
Keybanc downgraded Dover Downs (NYSE: DDE) to Hold from Buy due to expectations of significant movement in the Maryland state legislature regarding the issue of slot machine legalization, which could pressure shares.
Meruelo Maddux (NASDAQ: MMPI) was cut to Sell from Neutral at UBS based on tightening credit markets.
Friedman Billings downgraded shares of Fifth Third (NASDAQ: FITB) to Underperform from Market Perform on this morning's acquisition of First Charter Corp...
OTHER DOWNGRADES:
Alliant Techsys (NASDAQ: ATK) was cut to Market Weight from Overweight at Thomas Weisel.
National Semi (NYSE: NSM) was removed from Goldman's Favorites Value List.
MOST NOTEWORTHY: Genesit Energy LP (GEL), EnerNoc (ENOC) and Comcast (CMCSA) were today's noteworthy initiations:
Genesis Energy (AMEX: GEL) was initiated with a Buy rating and $40 target at Stanford, as the firm believes the company's affiliation with Denbury Resources and pending acquisition of petroleum products, terminals, and transportation businesses from the Davison family will drive rapid growth.
EnerNoc Inc (NASDAQ: ENOC) was initiated with a Hold rating and $42 target at Jefferies, due to valuation. EnerNoc was also initiated at Morgan Stanley with an Equal Weight rating and $40 target.
Stifel expects Comcast (OTC: CMCSA) to benefit from higher penetration levels of DVR and HDTV set-top boxes over the next several years and initiated shares with a Buy rating and $34 target.
OTHER INITIATIONS:
Select asset managers were initiated at Credit Suisse:
Deutsche Bank initiated Ryland Group (NYSE: RYL) with a Buy rating and $52 target, as well as Pulte Homes (NYSE: PHM) and Meritage Homes Corp (NYSE: MTH) with Hold ratings and a $23 target and $29 target, respectively.
Last week USA Today ran an article that caused millions of us to pause and think, "Gee, I wish I would have owned..." or "I knew that company was going to be huge!" The article highlighted the best 25 performing stocks of the past 25 years. From Microsoft Corp. (NASDAQ: MSFT) to Oracle Corp. (NASDAQ: ORCL) to Dell Inc. (NASDAQ: DELL) to Eaton Vance (NYSE: EV) to Franklin Resources, Inc. (NYSE: BEN). Well, you get the idea. As I wrote about recently, any of these stocks bought 25 years ago and you'd be on Easy Street -- wherever that is. $100 invested in all 25 stocks, 25 years ago, would be worth $650,000 today. Imagine what $1,000 invested in each one would be worth today? You'd be measured in GDP terms!
So, now the next natural step is to figure out what are the top 25 stocks for the NEXT 25 years. But before I do this brain-teasing -- or crushing -- exercise, I have to lay out a few assumptions and a few ground rules.
First and foremost, the top 25 for the NEXT 25 years are certainly sub-$1 billion in market capitalization (market capitalization is all shares of a company times the market price). With the assumption of sub-$1 billion market cap, that may already eliminate a lot of our current favorite stocks. I mean, I love Apple and Google, but they have $82 billion and $150 billion market caps respectively. Sure, one could argue that both will be $300-400 billion in market cap at some point, but that's ONLY a 4-5 times increase in our money. Way too paltry for this exercise!
USA Today ran a feature article highlighting the top 25 stocks of the past 25 years. There were some expected names, you know, the ones that cause the immediate response of "I knew that," all the way down to a cringing "Oh man, are you kidding!"
MOST NOTEWORTHY: Bristol Myers Squibb Co (BMY), Krispy Kreme Doughnuts Inc (KKD), Martha Stewart Living Omnimedia Inc (MSO) and New Century Financial Corp (NEW) were some of today's more notable upgrades:
UBS upgraded shares of Bristol Myers Squibb Co (NYSE: BMY) to Buy from Neutral. The firm finds the recent pullback an attractive buying opportunity given the possibility of a takeover approach. The broker also believes BMY will likely win its Plavix patent case.
CIBC resumed coverage of Krispy Kreme Doughnuts Inc (NYSE: KKD) with a Sector Performer rating, up from its recent Underperformer rating, citing resolutions to numerous accounting and legal issues for the upgrade.
Morgan Stanley upgraded Martha Stewart Living Omnimedia Inc (NYSE: MSO) to Equal Weight from Underweight.
Bear Stearns upgraded New Century Financial Corp (NYSE: NEW) to Peer Perform from Underperform saying downside risk is limited to $10-$11, but sees upside if business stabilizes and liquidity improves...
OTHER UPGRADES:
JP Morgan raised Eaton Vance Corp (NYSE: EV) to Neutral from Underweight to reflect the company's strong fund sales and continued capital returns to shareholders.
AG Edwards replaced Exxon Mobil Corp (NYSE: XOM) on its Focus Portfolio, adding Chevron Corp (CVX) to reflect the company's improved financial strength and attractive valuation.
Lehman Brothers upgraded Apple Inc (NASDAQ: AAPL) to Overweight from Equal-Weight with a $105 target based on the recent pullback in shares.
Friedman Billings raised Hess Corp's (NYSE: HES) rating to Outperform from Market Perform, based on growth reserves and an improving outlook.
Merrill Lynch upgraded Logitech International SA (NASDAQ: LOGI) to Buy from Neutral.
Matrix upgraded Abbott Laboratories (NYSE: ABT) to Buy from Hold on valuation.
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