| |
SMARTMONEY.COM: Magellan's Latest Tech Picks
By Mark McLaughlin
Smartmoney.com
NEW YORK (Dow Jones)--Is Robert Stansky, manager of the $97.5 billion Fidelity
Magellan Fund (FMAGX), a tech bull or bear? It's hard to tell from his fund's latest
semiannual report, released Monday. "Valuations in certain areas - particularly
technology - are quite high historically," warns Stansky. Then he goes on to predict
short-term volatility for the tech sector if investors keep piling into these stocks with no
regard for valuation.
Nevertheless, Stansky increased Magellan's technology stake from 20.8% to 22.1% of
assets in the six months ended Sept. 30. While that's still less than the 25% technology
allocation in the S&P 500, it's far from bearish. And Stanksy can thank technology
holdings like Oracle (ORCL) and Cicso Systems (CSCO) for his 16.3% year-to-date
gain, which is three percentage points higher than the S&P 500.
"His words don't fit the pattern of his purchases and sales," says Jim Lowell, publisher of
the Fidelity Investor newsletter. "He's trying to temper the enthusiasm of the last three
months or even the last three weeks where investors assume technology can do no
wrong or can recover in a few trading days."
Within his technology allocation, Stansky has become more conservative, replacing
profitless dot-coms with profitable telecoms. For starters, he cut his America Online
(AOL) stake by 50% and increased telecom giant Lucent Technologies (LU) by over
200%, Intel (INTC) by 71% and Texas Instruments (TXN) by 60%. Other sales included
small positions in Autobytel.com (ABTL), Autoweb.com (AWEB), Healtheon/Web MD
(HLTH), About.com (BOUT) (formerly MiningCo.com), OneMain.com (ONEM) and
Priceline.com (PCLN).
At the same time, he added 17 new technology stocks. These include Yahoo! (YHOO),
Internet advertising leader DoubleClick (DCLK), as well as software and storage plays
Inktomi (INKT), Tibco Software (TIBX), Xoom.com (XMCM), Gadzoox Networks (ZOOX)
and Network Appliance (NTAP). Other additions are companies involved in supplying the
networks or pieces of the networks that will carry voice and data, including Nortel
Networks (NT), JDS Uniphase (JDSU), Redback Networks (RBAK) and Broadcom
(BRCM).
"It's a shift towards a more mature vision of the new economy," explains Lowell. "He
wants to own the parts rather than the frills and the quick bang-for-your-buck [stocks]." |
|
