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Top Funds Add Retailers And Apparel Firms Like Kors

Posted
11/5/2012 5:24:00 PM
By: Investor's Business Daily
Referenced Stocks:CHS;GNC;GPS;KORS;VSI

The country's best-performing mutual funds ramped up their appetite for apparel stocks ahead of the holidays.

Leading funds have been adding apparel makersChico's FAS ( CHS ),Gap ( GPS ) andMichael Kors ( KORS ).

They've also shopped specialty stores, such asGNC Holdings ( GNC ) andVitamin Shoppe ( VSI ), in their latest reporting periods.

As a result of seeing higher spending at the mall, fund managers have been banking on credit card processorsVisa (V),FleetCor Technologies (FLT) andPortfolio Recovery Associates (PRAA) to do well.

IBD found 28 top-notch funds buying Michael Kors, investing an estimated $194 million in their latest reporting periods.

Luxury Apparel

The Hong Kong-based firm makes a luxury line of apparel, shoes, accessories and handbags for men and women. It's marketed under several labels by Michael Kors, its founder and designer.

As of June, the company operated a total of 321 stores, comprised of 253 of its own retail stores and 68 stores by licensing partners.

After breaking out of a shallow five-month base in August, the stock has been trading in a flat base, near its 52-week high of 57.95. It's gained 107% so far this year and 180% from its debut price of 20 last December.

The company has seen impressive triple-digit earnings growth the past four quarters. Revenue growth has been rock steady in the double digits for the same period. It's doing so well that it recently raised guidance for its fiscal second quarter and 2013.

Top-performing funds also liked cable-satellite giantComcast (CMCSA), investing an estimated $748 million in the latest reporting period. Its group ranked No. 17 among 197 industry groups as of Monday.

The provider of cable TV service and content is near a 52-week high and boasts an IBD Composite Rating of 99, the highest possible. Analysts see earnings growth slowing to 13% in Q4 and 14% in 2013.

Sell Side

The nation's top funds have been unloading medical stocks such asMcKesson (MCK),UnitedHealth Group (UNH) andPfizer (PFE) in their latest reporting period.

Gold and silver minersRandgold Resources (GOLD) andNewmont Mining (NEM) were also sold by top funds. Gold prices have been declining in recent weeks as the dollar rallied.