Fidelity's Outstanding Stock Picks

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 |  Includes: AAPL, AMZN, BRK.A, BRK.B, C, CAT, CRM, CVX, DIS, EBAY, GE, GG, GOOG, HAL, JPM, KO, MCD, ORCL, OXY, PFE, PG, PM, QCOM, RDS.A, RDS.B, SLB, SU, TD, UTX, V, WFC, XOM
by: Efsinvestment

FMR LLC, also known as Fidelity Investments is one of the largest institutional investors in the equity market. Therefore, it is worth investigating Fidelity's top equities, especially because there are significant differences as compared to its closest competitor, Vanguard Group. Fidelity is a truly global investment titan with $1.5 trillion of assets under management. Fidelity's largest equity mutual fund, Contrafund has almost $70 billion net asset value with an expense ratio of 0.92%. The most actively managed equity fund, Magellan, has $19.79 billion in assets with a slightly lower expense ratio of 0.75%. With over 20 million investors through individual and institutional accounts, Fidelity is one of the most prominent institutions in the Wall Street. According to the latest filings submitted to I-Metrix Edgar-Online Fidelity's top equity holdings are as follows:

Company Name

Ticker

Sector

$ Market Value

YTD Return

Profit

GOLDCORP

GG

Basic M.

3,384.12

5.62%

180.07

GENERAL ELEC.

GE

Conglomerates

2,983.69

8.76%

240.32

UNITED TECH.

UTX

Conglomerates

3,001.91

6.56%

184.80

COCA COLA

KO

Consumer G.

4,899.36

-0.41%

-20.17

PHILIP MORRIS

PM

Consumer G.

2,390.69

12.50%

265.63

PROCTER & G.

PG

Consumer G.

2,911.67

-5.01%

-153.57

CHEVRON

CVX

Energy

3,261.62

17.08%

475.81

EXXON

XOM

Energy

6,622.08

14.75%

851.20

HALLIBURTON

HAL

Energy

2,239.00

17.55%

334.28

OCCIDENTAL

OXY

Energy

3,182.92

3.29%

101.38

ROYAL DUTCH

RDS.A

Energy

5,198.53

9.22%

438.84

SCHLUMBERGER

SLB

Energy

3,536.31

8.60%

280.04

SUNCOR ENERGY

SU

Energy

2,447.71

16.02%

337.98

BERKSHIRE HATH.

BRK.A

Financial

3,079.89

5.13%

150.29

CITIGROUP

C

Financial

4,493.64

-6.34%

-304.18

JPMORGAN CHASE

JPM

Financial

5,734.68

8.47%

447.80

TORONTO DOM.

TD

Financial

2,602.18

16.80%

374.29

WELLS FARGO

WFC

Financial

6,312.60

2.17%

134.07

PFIZER

PFE

Healthcare

2,357.01

16.96%

341.78

CATERPILLAR

CAT

Industrial G.

2,259.52

17.36%

334.23

AMAZON

AMZN

Services

3,003.22

-5.92%

-188.98

WALT DISNEY

DIS

Services

4,144.24

13.36%

488.42

EBAY

EBAY

Services

3,185.19

9.02%

263.53

MCDONALDS

MCD

Services

3,224.13

-1.50%

-49.10

VISA

V

Services

2,708.12

3.57%

93.35

APPLE

AAPL

Technology

19,090.60

8.64%

1,518.25

GOOGLE

GOOG

Technology

9,533.64

-3.13%

-308.04

ORACLE

ORCL

Technology

3,722.33

4.19%

149.69

QUALCOMM

QCOM

Technology

3,040.63

5.78%

166.15

SALESFORCE.COM

CRM

Technology

2,459.55

-3.04%

-77.11

Total/Average

127,010.77

6.87%

7,051.06

Weighted Average

5.88%

Click to enlarge

The YTD performance of Fidelity's top equity holdings is outstanding compared to other institutional investors. I have been analyzing several mutual fund performances, and Fidelity's performance is certainly the best. While investment banks hold S&P 500 (NYSEARCA:SPY) as their top holding, Fidelity's top equity is Apple, followed by Google. The basic average of the portfolio was 6.87%, which is reduced to 5.88% when the weights are implemented. Yet, Fidelity's top equities were able to beat SPY return [4.86%] by 1%. That is a considerable success given that JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) could not catch up with S&P 500. Fidelity's largest competitor, Vanguard Group was also among underperformers. Moreover, Fidelity has outperformed its peers with a diversified portfolio:

Fidelity's top equities are energy holdings, followed by financial stocks, and consumer goods. While energy stocks performed well, Fidelity's portfolio managers best bet was on Pfizer and Caterpillar. Pfizer, a dividend pharmaceutical, gained 16.96%, boosting the Fidelity's portfolio by a whopping $341.78 million. Caterpillar's outstanding capital gain of 17.36% brought in $334.23 million of profits. Fidelity's top basic material choice, Goldcorp returned $180 million in profits. Goldcorp was a brilliant choice among other gold corporations given the reduction in gold prices. The following graph shows the year-to-date profit/loss performance analysis:

Fidelity Performance Breakdown

While Apple was the best performer among technology stocks, Google and Amazon were the worst performers, costing Fidelity $308 million, and $188 million, respectively. Procter & Gamble, a safe dividend aristocrat, showed disappointing returns. Salesforce.com, an aggressive growth company that provides online solutions for firms, is another stock with negative returns. However, the most unfortunate move of Fidelity's portfolio managers was increasing Citigroup shares by almost 50%. Citigroup was the worst performer among financial stocks with a ytd return of -6.34%. Increasing Citigroup shared by 50% cost Fidelity more than $150 million. The negative return of Citigroup is worth investigating further. Many prominent hedge funds are extremely bullish about Citigroup. Therefore, we should not blame Fidelity managers for increasing their shares by 50%. In the last quarter, David Tepper's Appaloosa Management increased Citigroup holdings by 129%. It looks like everyone is bullish on Citi, yet the stock price is off-the-road. Something sounds extremely fishy here. We might see an explosion in Citigroup shares, probably after some (yet unknown) news. The analysts might be cautiously waiting for each other for serial upgrades on share prices, as well.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.