Legendary growth manager Bill Danoff manages the $64 Billion Fidelity Contrafund, FCNTX. Contrafund has earned Morningstar's 5-star rating for several years due to its exceptional long-term track record. Over the last 10-year period in which the S&P 500 was roughly flat, Contrafund achieved an exception 7.3% load-adjusted return.
How does he do it? Danoff purchases companies that have the ability to grow on average more than "15-17% over the next 5-10 years" and works with a team of 120 analysts to identify the "best of breed" companies with strong competitive moats. Danoff's current best ideas include:
COMPANY | TICKER | % NET ASSETS | Position Change |
Apple, Inc. | 8.9% | Reduce | |
Google, Inc. | 4.7% | Increase | |
Berkshire Hathaway Inc | 3.2% | Increase | |
McDonald's Corporation | 2.9% | Reduce | |
The Coca-Cola Co | 2.7% | Increase | |
Amazon.com Inc | 2.1% | Increase | |
Noble Energy Inc | 1.7% | Increase | |
The Walt Disney Co | 1.7% | Reduce | |
Wells Fargo & Co | 1.6% | Reduce | |
TJX Companies | 1.5% | Increase | |
Nike, Inc. B | 1.3% | Reduce | |
Colgate-Palmolive Company | 1.3% | Increase | |
Chipotle Mexican Grill, Inc. A | 1.2% | Reduce | |
Dollar Tree Stores, Inc. | 1.0% | Increase | |
Oracle Corporation | 1.0% | Reduce | |
Gilead Sciences Inc | 1.0% | Increase | |
Visa, Inc. | 0.9% | Increase |
Danoff has held star-performers Apple and Google for a number of years. A 9% position in the fund signals a large vote of confidence about the future prospects of Apple. Danoff has been trimming his position in Wells Fargo and Nike, which is likely a signal of his reduced expectations about the prospects for these stalwarts. Despite its high value multiple, Chipoltle remains a top pick in Contrafund: There are few restaurant concepts that are projected to grow 20% for the next 5 years.
Other top buys include Occidental Petroleum (OXY), Accenture (ACN), and Anadarko Petroleum (APC).
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
