CMVT a "new" holding of the Fidelity Magellan fund.
In the six-month period between October and March, Stansky added 53 new tech holdings, including Comverse Technology.
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Magellan buoyed by Net
Manager Stansky says new tech stocks helped performance; sees more potential
May 22, 2000: 12:56 p.m. ET
NEW YORK (CNNfn) - Despite his continued concern about high valuations in technology stocks, Fidelity Magellan's Robert Stansky placed bets on some promising Internet-related companies whose "rapid stock gains ... had a positive impact on the fund's performance" over the past year, according to Magellan's annual report.
"Because some of these companies are in the early stages of profitability, I focused on those companies with products that I believed had significant growth prospects," Stansky said in the report, which was filed with the Securities and Exchange Commission on Friday.
Among his picks were: Juniper Networks (JNPR: Research, Estimates), which makes high-speed network routers; Internet access equipment supplier Redback Networks (RBAK: Research, Estimates); and optical network equipment company Sycamore Networks Inc. (SCMR: Research, Estimates).
" ... I recently had to rely somewhat on a sense of market psychology when choosing these companies as they're only starting to show quarterly earnings," Stansky said in the report. "I had to evaluate how the market might reward those with the brightest potential long into the future."
In the six-month period between October and March, Stansky added 53 new tech holdings, including Juniper and Sycamore, according to the independent newsletter Fidelity Investor. Other new holdings included semiconductor system solutions provider PMC Sierra (PMCS: Research, Estimates), computer and telecommunications systems maker Comverse Technology (CMVT: Research, Estimates) and Internet software provider Phone.com (PHCM: Research, Estimates).
"So much for those who continue to mistake Magellan as a closet index fund. Stansky, in deed and in word, is clearly a manager bent on outperforming the market," said Fidelity Investor editor Jim Lowell in a statement.
The so-called "April tech wreck" did not tamp Stansky's concern about high valuations, however. On the other hand, it did not suppress his appetite for those companies in the sector with the greatest promise.
"While I do believe that this sector offers the greatest potential for growth in the marketplace over the next three to five years, we have to expect volatility and further downdrafts along the way," he said. "Of course, that can provide the fund buying opportunities in those companies that I believe are best positioned for strong earnings growth."
Magellan beats S&P, but lags peers
Magellan, which is down 3.92 percent year to date, closed at $128.45 per share on Friday. For the 12-month period ended March 31, Stansky said Magellan rose 21.11 percent -- surpassing the S&P 500 Index, which climbed 17.94 percent, but below the average return of its growth funds peer group, which rose an average of 32.16 percent, according to Lipper.
On a 10-year basis, however, Magellan has risen 18.56 percent, above the Lipper large-cap fund average of 16.66 percent.
Shares of Juniper, meanwhile, were down 9 to 154 on Monday morning. Shares of Redback shed 3-29/32 to trade at 59-1/32. And stock in Sycamore dropped 9-1/8 to 71-13/16.
In April, Fidelity revealed that Magellan had boosted its technology allocation, the fund's largest sector holding, to more than 35 percent at the end of March, up from 30.5 percent at the end of January.
Magellan, long the world's No. 1 mutual fund, was knocked from its perch by the Vanguard 500 Index Fund in early April.
-- from staff and wire reports |
