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Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: Rob S. who wrote (11463)	8/16/2001 12:27:23 PM
From: jhg_in_kc	Read Replies (2) \| Respond to of 12623

Warning Leaves Fidelity Holding Burnt Ciena By Ian McDonald Senior Writer 8/16/01 11:46 AM ET One of the last ports in 2000's tech tempest has been ravaged, and now it's smacking Fidelity fundholders right in the wallet. Ciena's (CIEN:Nasdaq - news - commentary - research) shares dropped 28% Thursday after the optical networker slashed its growth forecasts. That means more red ink for the growing camp of tech and growth funds that hold the stock -- especially Boston fund titan Fidelity, which owned almost 15% of the company's shares on June 30. Big-cap growth funds, down more than 35% over the past 12 months, have been aggressive buyers of Ciena over the past year and a half. Holding Ciena helped stem a tide of losses last year, but now those funds and their shareholders are seeing the flip side. It's not a small group, either. All told, more than 440 funds own Ciena, and big-cap growth funds own 32% of the company, according to Chicago fund tracker Morningstar. The company's fan club bloomed in recent months. At the start of last year about 7% of large-cap growth funds owned Ciena, but that doubled by 2000's halfway point. At the end of June the stock was held by 33% of large-cap growth funds and 55% of tech sector funds. A Growing Fan Base Growth managers were liking Ciena Source: Morningstar. It's easy to see why fund managers fell in love with Ciena last year. While every other tech company was missing analysts' earnings estimates and watching their shares fall through the floor, Ciena made like Barry Bonds, banging out home run after home run. The stock's 183% rise in 2000 probably helped some managers squeak past their less fortunate peers. Mr. Storm, Meet Mr. Last Port Ciena's shares held up last year, but now it's look out below CIEN S&P 500 YTD Return -65.4% -10.1% 2000 182.6 -9.1 1999 293.1 21.0 1998 -76.1 28.6 Source: Morningstar. Then again, a gander at the dreary returns posted by some of Ciena's biggest fans argues against the one-stock magic bullet theory. The stock was the Fidelity Aggressive Growth fund's top holding at the end of June. Manager Bob Bertelson has stumbled badly since taking the fund's reins last year, and Ciena's swoon won't help. The fund is down an eye-popping 60% over the past 12 months, trailing 98% of its peers and lagging behind the S&P 500 by more than 40 percentage points. Several other Fidelity funds own Ciena as well, according to their most recent portfolio reports. The list includes the Fidelity OTC and Fidelity Select Technology funds, where the stock comprised more than 1% of each fund's assets. Fidelity Magellan also owns shares, but they added up to just 0.16% of the fund's assets at the end of the first quarter. Other big holders include the Janus Twenty, White Oak Growth Stock and Oppenheimer Growth funds. Each is down more than 40% over the past year and trails at least 80% of its peers. Fidelity is the company's largest institutional shareholder, according to LionShares.com, a Web site that tracks institutional stock ownership. That was great six months ago, but now the stock is just more dead weight in tech-heavy portfolios.