Markets

A Top Mutual Fund Sticks To Growth-Oriented Stocks Like These

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MFS Mid Cap Growth Fund ( OTCIX ) keeps a steely eye fixed on its prize. The $1.8 billion fund seeks stocks of companies best poised for growth several years into the future.

When the market retreats, as it did in from December through early February, and investors favor defensive names rather than growthier ones, that hurts a fund like the MFS portfolio. Its three-month trailing performance going into Tuesday was mired around the middle of its midcap growth peer group of mutual funds tracked by Morningstar Inc.

That lags the pace it's more accustomed to. Over the past five years its 9.51% average annual gain topped 81% of its direct rivals, which averaged a 7.56% yearly return. The S&P 500 galloped ahead at an 11.21% yearly pace.

Nvidia ( NVDA ) is Mid Cap Growth's type of stock. The fund increased its stake and weighting in each of its three most recent monthly disclosures, for November through January.

Up 28% since a Feb. 11, the stock is nearing its 34.04 entry in a cup-shaped base.

Earnings per share rose 13%, 18% and 21% the past three quarters. The company designs graphic processing units that are used in computers, mobile devices and game consoles.

The stock has a Composite Rating of 99 from IBD. The Composite Rating combines IBD's five stock-performance ratings, including EPS and RS Ratings, with 99 being the highest. The stock also has a 1.4% dividend yield.

Below Full Price

Five Below ( FIVE ) runs a chain of teen-targeted discount stores that sell a variety of goods, ranging from apparel to consumer electronics, games and candy.

The stock, which sports a 99 Comp Rating, is up 41% since a 27.68 low on Dec. 2. The uptrend began when Five posted second-quarter earnings, showing 33% EPS growth, reversing a 13% prior-quarter decline.

The company opened its first store in Miami on March 4. The stock is in the IBD 50 list of leading growth stocks.

Payment processor Vantiv ( VNTV ), another IBD 50 name, is up 22% since a 43.20 low on Jan. 21. Accelerating, EPS rose 15%, 19%, 20% 23% the past four quarters.

Trading around 52 in a cup-shaped base, the stock shows a 53.56 buy point.

Vantiv has a 97 Comp Rating. The company benefits from merchants' and financial firms' switch to chip cards and their terminals. Vantiv's other cybersecurity products also help the stock's climb.

Henry Schein ( HSIC ), with a 97 Comp Rating, is up 14% since Feb. 8.

The stock's climb began a day before the company announced record fourth quarter and full-year 2015 results. The company also affirmed its EPS guidance for 2016.

EPS for the global provider of health care products and medical equipment grew 8%, 8%, 16% and 7% the past four quarters.

O'Reilly Automotive (ORLY) has a cup-shaped base with a 278.06 entry. An alternative earlier entry is at 266.33.

An early entry crops up when a stock crosses an area of price resistance within a base in unmistakably strong volume. The volume is a sign that funds are behind the stock's move.

The stock is benefiting from low gasoline prices. Those encourage more driving, which leads to more maintenance. Some analysts recently raised price targets or buy-sell-hold recommendations. Last month, the company reported better-than-expected Q4 results and added $750 million to its share buyback plan.

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


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

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