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This is a thread to keep tabs on Erin Sullivan who probably is one of the hottest fund managers this year. William F. Wager Jr. posted this in July. Top 10 Holding Fidelity Aggressive Growth (from Sunday NY Times)--> By WILLIAM R. LONG Fidelity Investments, known for a willingness to let young stock-pickers run big funds, and to invest the money aggressively, Erin A. Sullivan may be the quintessential portfolio manager. Ms. Sullivan, 29, has been in charge of the $5.96 billion Fidelity Aggressive Growth fund since April 1997. In that time, the fund has posted total returns of 51.83 percent, annualized, versus 33.16 percent for the Standard & Poor's 500-stock index, according to Morningstar Inc., the financial publisher in Chicago. This year through July 15, the fund was up 44.34 percent, nearly tripling the 15.4 percent gain of the S&P 500. Ms. Sullivan goes about her business with the self-assurance of a Harvard graduate, the analytical rigor of a math theoretician and the vigor of a marathon runner, all of which she is. But she has not entered a marathon race roughly since she took the reins of Aggressive Growth. "It's hard to find time for anything else," she said. Ms. Sullivan is kept busy picking new stocks and keeping track of the 160 to 190 issues that are usually in the portfolio. She joined Fidelity in 1991 as a research associate who followed initial public stock offerings and medical-device and hospital-supply companies. As an analyst, starting in 1993, she covered the retail industry, and she became manager of the Fidelity Select Retailing Portfolio in 1995. She managed the Select Software and Computer Services Portfolio for about five months before taking over Aggressive Growth, which was then named Emerging Growth. The name was changed last January. Ms. Sullivan said many investors had interpreted "Emerging Growth" to mean that the fund held small-capitalization stocks, though it actually owned many large-cap stocks. "The fund's investment style has always been aggressive," she said. "The style hasn't changed at all." She uses computer programs to screen for companies with the fastest earnings growth. She screens for revenue growth, too, she said, "to make sure that I'm not missing opportunities" in young companies that reinvest heavily instead of reaping profits. Ms. Sullivan also seeks earnings growth driven by gains in sales volume rather than price increases. "One of the things that get me nervous about companies that are growing their earnings solely through increasing prices is that that price power might go away overnight, and then your earnings stream is in jeopardy," she said. Ms. Sullivan might sell a stock, she said, if she detects hints of a downturn in company fundamentals, like a buildup in inventory or a loss in market share. And she is likely to sell if a company's stock goes up too fast. "If a company hits a price target earlier than I expected, I think it's wise to take profits," she said. Ms. Sullivan's focus on fast-growth companies and industries has resulted in a concentrated fund. She said her top 10 stocks might account for around 30 percent of total assets. A tally at the end of June showed that 41.7 percent of the fund was invested in technology companies, 15.7 percent in telecommunications and 13.9 percent in biopharmaceutical and medical device companies. Among her top 10 holdings is Exodus Communications, which operates computer-network and Internet servers for other companies on an outsource basis. The company is investing heavily in data centers around the United States and abroad, so it is not yet profitable, Ms. Sullivan said, "but they're getting very close, and the majority of their data centers are cash-flow positive." She said that revenues of Exodus had more than quadrupled last year, to $53 million, from $12 million in 1997, and that in the first quarter of 1999, they were running at a $120 million annual rate. Exodus, based in Santa Clara, Calif., had its initial public offering last year. The stock has traded as low as $7.75 and as high as $109; it closed last week at $138. Ms. Sullivan began buying Exodus stock in December, at a price "in the low $30s," she said. Another communications company in the fund's top 10 is MCI Worldcom. Ms. Sullivan especially likes the company's fast expansion in data transmission, Internet and international business services. She said those segments have been growing at 60 percent a year as the company concentrates on giving corporate customers a wide range of "end-to-end telecom services." When Ms. Sullivan took over the fund, it had a small holding of Worldcom stock, then trading in the mid-$20s. She gradually built up the position. With a big boost from the acquisition of MCI Communications, MCI Worldcom revenues grew to $17.67 billion in 1998 from $7.35 billion in 1997. The stock is now at $90.125, more than double its 52-week low of $39. The fund's top 10 also includes Biogen Inc., the biopharmaceutical company. She said its healthy performance over the past year came largely because of Avonex, a once-a-week injectable treatment for multiple sclerosis. Strong sales of Avonex contributed to a 38 percent increase in Biogen's second-quarter net income, and operating earnings exceeded analysts' estimates by 2 cents a share. The stock, which split 2-for-1 late last month, closed on Friday at $71.625, up from a 52-week low of $20.875. Ms. Sullivan first bought Biogen in September at a split-adjusted price in the high $30s. Posted on Dec. 10th by Mr. Wager Jr. too. Fidelity Aggressive Growth's Sullivan Stays Invested By JOE NIEDZIELSKI NEW YORK -- Investors continue to shower Fidelity Investment's (X.FIN) red-hot Aggressive Growth Fund with fresh cash and manager Erin Sullivan hasn't had much of a problem putting it to work. Aggressive Growth, which started the year at roughly $2.9 billion in net assets, has ballooned to slightly more than $11.5 billion through Nov. 30, according to Fidelity's monthly mutual fund guide released on Friday. Sullivan lowered the portion of the fund's assets held in cash to 0.9% as of Oct. 31 from 2.9% at the end of the third quarter. The fund is among the top gatherer of inflows at Fidelity this year. David O'Leary, president of Alpha Equity Research in North Hampton, N.H., estimates that Aggressive Growth had inflows of about $1.4 billion in November and that the fund has taken in about $5.3 billion this year. Fidelity doesn't discuss fund flows for individual funds, but confirmed that Aggressive Growth is one of its top sellers this year. Sullivan's big bets on technology stocks have guided the fund to an 86.63% return this year. For a good part of the year, the fund's tech weighting has been more than double that of the Russell 2000, its benchmark. Sullivan again increased the fund's tech weighting during October to 47.9% from 46.8% at the end of September. Exodus Communications Inc. (EXDS), the fund's top holding at the end of Sept. 30, is up almost 900% this year. Another top 10 holding, Qualcomm Inc. (QCOM), has soared more than 1,400% since the start of the year. (Fidelity only discloses changes in fund holdings on a quarterly basis.) Even a top 10 holding like Tyco International Ltd. (TYC) hasn't been able to put a dent in the fund's performance. Tyco, the fund's eighth-largest holding at the end of the third quarter, fell to a 52-week low of 27 7/8 Thursday. But Aggressive Growth ended September up 36.88% compared to its current 86.63% returns through Thursday. Sullivan also boosted the funds allocation to health-care stocks to about 16.5% of the portfolio at the end of October from 13.8% in September. Utility stock holdings also increased to 14.4% as of Oct. 31, up from 13.9% in September. -Joe Niedzielski, Dow Jones Newswires, 201-938-2123; joe.niedzielski@dowjones.com Extremely hard to get this rate of return with this amount of capital. If she demonstrates ten years of beating the S&P and she will be a legend ala Soros, Lynch, Buffet. Hope she doesn't burn out. Jack | ||||||||||||
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