Investor's Business Daily, July 25th, 2007
If you're thinking about purchasing a car, you probably first want to know what grades it gets from auto experts.
Likewise, you should try to find out what the big money thinks about a stock before you consider buying shares.
After all, mutual funds and other large investors account for a large chunk of a stock's price and volume action.
But where can you access such information? Go to the Daily Graphs Fund Center at investors.com. This premium service shows you funds' sponsorship ratings, which range from A to E, with A being best.
It can also tell you whether the mutual funds that own a stock have a good track record. Fund Center costs $249 a year, or $24.92 a month. A seven-day trial is $9.99.
How To Use It
From investors.com's home page, click on the "Fund Center" link in the rightmost column. Next click on the Stock Ownership button on the left side of the page. Type in the ticker symbol of the stock you're researching.
For this example, let's take a look at Research In Motion RIMM, one of the top stocks in the July 23 IBD 100. After you type in "RIMM" and hit enter, you'll get a list of mutual funds with the stock as one of their top 25 positions.
You can view the list by percentage of shares held or by percentage of fund assets invested.
In either case, you see a grade in the sixth column, under O'Neil Rank vs. All Funds. This grade gives the fund's performance rating over the past three years on a total return basis vs. all mutual funds.
In this example, for instance, Fidelity Canada's A+ Rating means the fund outperformed 95% of all other funds over the past 36 months. Janus Twenty's B+ Rating puts that fund in the top 20%, while Vanguard Capital Opportunity (B-) has beaten 70% of funds.
Keep in mind that funds report holdings just a few times a year, so the portfolio date can vary widely. Holdings may have changed over the past few months. The date is listed to the right.
To get more information about the fund, including the proprietary O'Neil Rank In Category grade, click on PR (profile) under the Additional Information column.
This grade tells you how the fund has performed among those with the same objective. Let's look at Janus Twenty, which scored an A+ within the large-cap growth category. It's outperformed 95% of all funds in the same category.
You can also get the fund's net asset value, net assets, year-to-date return, and best and worst one-year and three-year returns. The profile page also includes basic fund information such as its Web site.
From the RIMM page, you can also click on PF for more detailed performance numbers, or H for top 25 holdings. Both are under the Additional Information column.
Tips And Tricks
A quick way to see if a fund owns other leading stocks you favor is by clicking on the H. Through May 31, 2007, Janus Twenty's top 25 holdings included at least two other IBD 100 stocks: Apple AAPL and Potash Corp. of Saskatchewan POT.
From this page, you can also get back to the previous RIMM page by clicking on View Owners, the icon with three people on it, located to the left of the stock. You can even view RIMM's stock chart by clicking on View Graph, the chart icon to the left of the company's name.
