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Investing Specialists

Five Buy Ideas From Our Top Ultimate Stock-Picker

This manager's recent purchases have highlighted five stocks worth considering.

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By Jim Ryan | Senior Stock Analyst

With the market slipping somewhat during the month of May, several of our top managers have been able to pick up enough steam to surpass the returns of the S&P 500 Index (SPX) so far this year. As of the end of last week, eight of the 22 fund managers on our list of Ultimate Stock-Pickers are beating the benchmark, which has returned a little more than 4% since the start of January. Even more interesting, though, is that just five of our 22 top fund managers have beaten the index during the last year, with just two of these five actually beating the market year to date. This tells us that it is inherently difficult to draw any firm conclusion about our top managers' performance based on such short-term metrics.

This is why we try to focus on both near- and long-term investment performance when looking at either adding or removing managers from our list of Ultimate Stock-Pickers. This allows us to overcome periods when our managers are having a bad spell of performance, much like Bruce Berkowitz is going through with the  Fairholme (FAIRX) fund this year, or just about every one of our managers went through last year, when compared with the S&P 500. That said, we do believe that there is some value in looking closely at the stock selections and strategies of those managers that are outperforming in the near term, especially if those same managers have accrued a stellar track record of long-term outperformance.

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.