Credit: Shutterstock photoSince the sharp pullback on the heels of the U.K.'s surprise vote to leave the European Union (Brexit) on June 23, several stock funds have staged solid rebounds, driven in large part by highly rated stocks among their top holdings.
Among funds surpassing the S&P 500's 7.43% year-to-date gain as of July 26, those up the most in the past month and still open to new investors were $416 million Skybridge Dividend Value ( SKYIX ), up 10.39% in the past month; $113 million Thompson LargeCap ( THPGX ), up 9.79%; $3.6 billion Longleaf Partners ( LLPFX ), up 8.99%; $2.4 billion ClearBridge Value ( LMVTX ), up 8.81%; and $3.8 billion Loomis Sayles Growth ( LSGRX ), up 8.65%.
The top holdings of the five funds included the likes of Facebook (FB), which accounted for nearly 6% of Loomis Sayles Growth's $3.8% billion in assets as of its latest reporting period. The social media stock is up 10% since June 24 vs. 5.9% for the S&P 500. Facebook has a 99 Comp Rating and an A SMR (Sales + Profit Margins + ROE) Rating. SMR Ratings of A and B are the best.
IBD'S TAKE:Check IBD University for tips on how to select stocks to buy using tools such as IBD's SmartSelect Ratings. The Composite Rating rolls several SmartSelect Ratings into one road sign that tells you whether a stock has the traits of the big winners.
Trading around 123 on Wednesday afternoon, the stock is still in a buy range from a 121.18 buy point in a flat base. The growth of earnings per share is speeding up, having increased by 16%, 33%, 46%, 83% and 94% the past five quarters.
IBD'S TAKE:Jason Rubin , head of content at Facebook-owned Oculus -- which makes the Rift VR headset -- told IBD's Elaine Low that virtual reality is not just kid stuff. VR could have massive markets in tools for the disabled and elderly, not just in video games.
Alphabet (GOOGL), a top holding of two of the five portfolios, is up 17% since June 24. The Google parent combines its search engine with internet content services and software applications.
The stock has a 98 Comp Rating and an A SMR Rating. The stock's institutional support is growing. As of June 30, 4,125 mutual funds had stakes in the stock. That was up from 3,957 as of Sept. 30.
Cisco Systems (CSCO) is up 10%. The stock has a good 85 Comp Rating. It is the fourth-rated stock within the Computer-Networking group, whose top-rated stock is Silicom (SILC). The group ranks 76 out of 197, up from 138 four weeks ago.
Cisco's quarterly EPS growth over the past three stanzas is a modest 7%.
The stock has eight quarters of increasing fund ownership.
Utility AES (AES) accounted for about 3.6% of ClearBridge Value's assets as of its latest reporting date. AES was up 2.4% since June 24, as of Wednesday, vs. a 5.9% rebound by the S&P 500. AES is up 48% since its Jan. 20 low.
AES operates globally and has a dividend yield of 3.6%. The stock recently broke out from a cup-with-handle base and is still in a buying area as it trades about 3% above its pivot.
Is the stock perfect? No. Among other issues, it has a weak Composite Rating from IBD of 44. The Composite Rating, which starts at 1 and runs to 99, combines IBD's five performance ratings, including EPS and Relative Price Strength Ratings. Stocks poised to move higher often have a high Composite Rating. You should look for stocks whose rating is 95 or higher, which means that they've outperformed 95% of all other stocks in terms of their Composite Rating.
And remember, Composite Rating is just a starting point. It is not the sole sign of whether to buy or sell a stock.
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.
