Top-Performing Funds Latch On To Biotech And Discount Retail Stocks


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The country's best-performing funds of the past three months have been stoking their portfolios with big-cap biotech stocks, such asAlexion Pharmaceuticals ( ALXN ),Amgen ( AMGN ), Biogen Idec ( BIIB ) andRegeneron Pharmaceuticals ( REGN ).

As of Thursday, the IBD Medical Biomed/Biotech group was ranked No. 1 among 197 sectors. The group has been hovering among the top four spots for most of this year. The sector was up 16% this year through July.

Amgen,Gilead Sciences ( GILD ), Alexion andOnyx Pharmaceuticals (ONXX) each has notched new 52-week highs in recent weeks.

Managers of leading funds also have been shopping retail stocks, includingRoss Stores (ROST),TJX Cos. (TJX),Foot Locker (FL),GNC Holdings (GNC) andFrancesca's Holdings (FRAN).

Fast-food chainsPapa John's International (PZZA) andAFC Enterprises (AFCE), which runs Popeyes Chicken, have been stellar performers.

Top funds have also been snatching up cable and satellite operatorsComcast (CMCSA) andTime Warner (TWC).

Ross Stores

IBD found five top-notch funds adding Ross Stores, investing an estimated $1.90 million. The $249 million Hennessy Cornerstone Growth Fund added shares as of its latest reporting period.

The lousy economy is a boon for discount retailers such as Ross Stores. The Pleasanton, Calif.-based firm runs 1,037 Ross Dress For Less stores and 88 dd's Discounts stores in the U.S.

Ross' same-store sales for July jumped 7% to $709 million, up from $635 million a year earlier.

It raised second-quarter earnings guidance to a range between 80 and 81 cents, up from 77 to 78 cents as previously expected.

The stock has more than doubled from 33.50 during last summer's sell-off in August to a 52-week high of 70 in mid-July. It's pulled back to 66, just 5% off its high.

Sell Side

The best-performing funds have been taking profits in utility issues, includingFirstEnergy (FE),Atmos Energy (ATO) andPG&E (PCG) in their latest reporting periods.

A handful of property REIT stocks, such asFederal Realty Investment Trust (FRT),Essex Property (ESS),Omega Healthcare (OHI) andVentas (VTR), have been evicted by leading funds.

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

This article appears in: Investing , Mutual Funds
More Headlines for: ALXN , AMGN , BIIB , GILD , REGN

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