Top Funds Latch On To Ocwen, Financials And Tech

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The country's best-performing funds the past three months have been buying tech stocks in their latest reporting periods.

The group faced some head winds in the October market correction, but techs managed to eke out a 1.94% gain in December. They gained 12.8% for 2012.

Two big Internet networking solutions firms added by top funds includeEquinix ( EQIX ) andSolarWinds ( SWI ). Data storage firmsSeagate ( STX ) andWestern Digital ( WD ) were also popular among the smart money.


Managers of top funds were easing into chemical stocks, such asAshland ( ASH ),Westlake Chemical (WLK),Polyone (POL) andNewMarket (NEU), in their latest reporting periods.

Among IBD's 197 industries, chemicals-basic and -plastics sub-groups were ranked among the top 10 as of Wednesday.

Title, property and casualty insurersFidelity National Title Group (FNF) andFirst American Financial (FAF) were also bought by top funds. As mortgage rates continue to stay low, these two firms will benefit from the surge of new and refinancing mortgages.

IBD spotted 10 best-performing funds buyingOcwen Financial (OCN), investing an estimated $24.3 million in their latest reporting periods. The $308 million Fidelity Select Consumer Finance Fund owned a big stake in the firm.

The Atlanta, Ga.-based firm makes residential and commercial real estate, business and consumer loans. It also takes on troubled mortgages, an area big banks have been exiting.

As of October, it moved its servicing operations to St. Croix, the U.S. Virgin Islands. In doing so, it keeps expenses down by using an offshore labor force and minimizing taxes through foreign incorporations. It already has subsidiaries in Luxemburg and the Cayman Islands.

The stock performed very well in 2012. It soared from 14.48 last January to a 52-week high of 39.83 by mid-October. Since then, it's pulled back into a 10-week tight base, sitting at 35, just 12% off its high.

Sell Side

Leading funds unloaded big media stocks, such asWalt Disney (DIS),CBS (CBS),Viacom (VIAB) andNews Corp . (NWS), in their latest reporting periods.

The best-performing funds have been taking profits in financials, includingVisa (V),MasterCard (MA) andCapital One (COF).



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Mutual Funds

Referenced Stocks: ASH , EQIX , STX , SWI , WD

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