10 High Growth Quality Stocks From the Wells Fargo Advantage Growth Fund

by: MyPlanIQ

Thomas Ognar, manager of Wells Fargo Advantage Growth Fund (SGRNX), has outstanding growth stock picking skills. As of 8/11/2011, the fund delivered the following performance:

5 Yrs 10 Yrs 15 Yrs


10.82 6.31 8.36
S&P 500 TR 0.58 1.80 5.75
Click to enlarge

Ognar seeks long-term capital appreciation and invests principally in equity securities of companies that are believed to have prospects for robust and sustainable growth of revenues and earnings. Let's look at its top 10 tholdings:

Ticker Company Name % Asset
AAPL Apple, Inc. 5.49%
PX Praxair, Inc. 2.67%
KMX CarMax, Inc. 2.50%
WFM Whole Foods Market, Inc. 2.32%
CTSH Cognizant Technology Solutions Corporation A 2.30%
PXD Pioneer Natural Resources Company 2.22%
STJ St Jude Medical, Inc. 2.07%
ALXN Alexion Pharmaceuticals, Inc. 2.05%
PCLN Priceline.com, Inc. 2.03%
TSCO Tractor Supply 1.96%
Click to enlarge

These stocks have the following ratios:

SGRNX Large Cap Growth Average
Price/Earnings 23.69 16.67
Price/Book 3.75 2.97
Price/Sales 2.64 1.87
Price/Cashflow 13.60 9.75
3 Year Earnings Growth 20.22% 15.15%
Click to enlarge

So we can see that these stocks are not cheap, compared with other large growth stocks. But they have excellent earnings growth (20% in the last 3 years), as exemplified by stocks like Apple (NASDAQ:AAPL), Priceline (NASDAQ:PCLN) (which has enjoyed solid earning growth in this frugal economic environment) and Whole Foods (NASDAQ:WFM) (still enjoyed by upper class consumers who are actually less affected by this balance sheet repairing downturn).

The performance of these stocks is outstanding, even compared with diversified ETF portfolios:

Portfolio Performance Comparison

Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Retirement Income ETFs Strategic Asset Allocation Risk Profile 0 7% 28% 3% 8% 3% 8%
SGRNX 20% 223% 7% 44% 10% 46%
Retirement Income ETFs Tactical Asset Allocation Risk Profile 0 12% 45% 14% 70% 14% 62%
Click to enlarge

Portfolio Compare Link

Three Year Chart

Given the fund's low annual turnover rate (about 30%), stock investors should be able to look at these stocks as potential candidates for high octane stock portfolio construction.

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

Disclaimer: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.