Six Growth Stocks to Consider Buying
We've uncovered some potential buys using the investment methodology of one of our top managers.
By Swami Shanmugasundaram | Stock Analyst
As you may recall, when we relaunched the Ultimate Stock-Pickers concept just a few short months ago, we also refined our Investment Manager Roster to include some growth fund managers (as opposed to the prior roster, which had been almost exclusively made up of value managers). One of the managers that we added was the team at Chase Growth (CHASX), which has had a consistent track record since its inception in 1997, thanks to its disciplined stock investment approach. The fund carries a 5-star rating and over the past 10 years earned an average return of 1.1% per year, beating S&P 500 Index (SPX) handily by more than 3.3 percentage points. (Note: The Morningstar Rating for funds is distinct from the Morningstar Rating for stocks, as the former is based on funds' risk-adjusted past performance.)
The fund's investment strategy closely resembles the process that we follow at Morningstar when evaluating stocks--that is, it focuses on high-quality companies with strong fundamentals that are not too expensive. Once an investment idea yields the expected results, we look for strategic exits, much as Chase does with its own sell discipline. This adherence to a strict buy and sell discipline has helped the fund avoid many blowups. For example, Chase unloaded its stake in energy stocks when they hit the ceiling as oil ran up over $140 per barrel during the summer of 2008, thereby avoiding significant losses when the energy stocks crashed in third and fourth quarter of last year.
The Morningstar Ultimate Stock-Pickers Team does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.