Monday, July 24th, 2006
Finding growth guru stocks
One of the best ways to find great growth stocks is to look at what the legendary investors own. There are many resources available on the internet that reveal their secrets with a little digging.
Only use this technique as a way to generate ideas. Don’t buy a stock just because a great investor owns it. Like everyone else a great investor will be wrong on occasions. The shares may also have increased too much by the time you are alerted to them, or the company’s fundamentals could have changed. Once you find an interesting stock simply put it on a checklist and then carry out your usual battery of fundamental or technical tests. Only buy the stock if it meets your own investment criteria.
Another benefit of scanning top investors’ holdings is to learn about the type of stocks they own so you can copy their methods. Looking at real world investing examples enables you to get right inside the master stock picker’s head.
An example of using this technique is delving into the stocks that the great aggressive growth investor Richard Driehaus owns right now. Driehaus Capital Management makes the holdings of its two mutual funds publicly available.
These are the latest top 10 holdings of Richard Driehaus’s mutual funds:
DRIEHAUS INTERNATIONAL DISCOVERY FUND
(At 30 June 2006)
1. Vallourec SA
2. Tenarsis SA
3. CSR Plc
4. Topdanmark AS
5. JFE Holdings Inc
6. Petroleum Geo-Services
7. USG People NV
8. Banco de Sabadell SA
9. CSL Ltd
10. Komatsu Ltd
DRIEHAUS EMERGING MARKETS GROWTH FUND
(At 30 June 2006)
1. GOL Linhas Aereas Inteligentes SA
2. Shinsegae Department Store
3. Shinhan Financial Group Co. Ltd.
4. Raiffeisen International Bank Holding
5. Nhn Corp
6. Formento Economico Mex.
7. Lukoil Co. Spons ADR
8. America Movil ADR - Series L
9. Delta Electronics Inc
10. Kazakhmys PLC
A more detailed outline of the stocks the two mutual funds hold at 31 March 2006 is contained in the quarterly report for the Discovery Fund here and for the Emerging Markets fund here.
One stock this screen throws up is the world’s dominant Bluetooth chip provider, CSR, which is listed in London. An examination of the company reveals it is generating amazing growth with sales doubling in the last quarter. The Bluetooth market is also expected to surge as much as 70 per cent in 2006. CSR’s had a spectacular rise but the share price chart reveals increasingly volatile trading action during the recent correction so it may be worth standing aside for a while.
Global Growth Investor will regularly take a look at the top stocks held by successful growth investors. Do you keep tabs on the holdings of any successful investors? Let us know who and why by leaving a comment below.
Word Count: 414. This entry was posted on Monday, July 24th, 2006 at 8:01 am and is filed under FundWatch, Growth stock screens. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
