Fidelity's Shiel Bets Big On Best Ideas

At the helm of Fidelity Advisor Dynamic Capital Appreciation, Fergus Shiel focuses on fundamentals.

To execute his approach, Shiel sometimes must trade a lot. That's why his fund had a 150% turnover rate as of Feb. 28. His large-cap growth rivals tracked by Morningstar averaged a 107% turnover rate.

Shiel also bets big on his best ideas. He had 31% of his assets in his 10 biggest positions as of Feb. 28. He held 134 stocks.

His tack is working. Going into Thursday, so far this year the $919 million fund FRGTX was up 13.20%. Its large-cap rival tracked by Morningstar averaged a 12.10% gain. The S&P 500 was up 10.09%.

Over the past three years the fund's average annual return was 19.13% vs. 12.56% for its peers and 14.06% for the bogey.

The fund is the broker-sold version of Fidelity Capital Appreciation FDCAX. Fidelity put Shiel in charge of Cap Ap in 2005. He replaced Harry Lange, whom the giant Boston-based fund family moved to the helm of Magellan.

Potash Corp. of Saskatchewan POT, a top buy in the fund's latest disclosure period, is up 77% this year. The fertilizer firm benefits from rising demand for corn. Corn is an ingredient in ethanol, which can be used as a motor fuel or additive. The stock hit an all-time high Tuesday. Earnings rose 53% and 63% the past two quarters. Analysts polled by Thomson Financial see 48% growth for the June quarter.

Monsanto MON, a top holding of the fund, is up 33%. Monsanto makes agricultural products, including corn seed. A highflier like Potash, the stock reached a new all-time peak last Friday.

Apple AAPL is up 63% this year. Earnings per share growth has accelerated the past four quarters.

Hype for Apple's iPhone has been a key driver of the stock. Some investors expect the iPhone to help so-called smart phones, made by Apple and others, move into the mass market. Now such feature-laden phones are often affordable only by corporate customers.

Helped By Handhelds

Many investors also see the i- Phone helping Apple broaden its product lineup. Apple is up 53% since the first quarter alone. That's the sort of momentum-fed name that Shiel likes. The stock was a top buy for the fund in its latest report.

Research In Motion RIMM is also a top buy. The maker of the BlackBerry and other wireless handheld devices is up 80% this year. EPS growth has accelerated for three quarters.

In late September the stock broke into new all-time territory. It has stayed there since. The firm is benefiting from the expected expansion of the market for high-end handhelds, helped by Apple's iPhone. On Tuesday the firm unveiled a new BlackBerry model that allows wireless voice and data access over both cellular and WiFi networks.

The stock has surged 51% since June 28. That's when the company announced first-quarter earnings per share soared 74% from the year-earlier quarter. Sales exploded 76% to $1.08 billion.

RIM added 1.2 million BlackBerry subscribers in Q1. That beat forecasts and was 18% above the prior quarter. The firm expects to sell its 20 millionth BlackBerry this summer.

China Mobile CHL, yet another top buy, is up 33% this year. The firm is China's leading wireless voice and data phone service provider. And it is adding 5 million subscribers per month, according to Morningstar. The firm has 12 quarters of double-digit earnings growth.

Average revenue per user is falling, says China Economic Review. That's because the firm has pushed its search for new subscribers into rural areas. There, customers tend to spend less for phone services.

But the firm is moving to offset that slowdown by offering more expensive services, including navigation services, says Cellular-News.com.

Google GOOG is up 19% so far this year. The firm is diversifying by buying DoubleClick. That would give Google entry to the online display ad market. The move needs Federal Trade Commission approval. The stock sold off after hours Thursday on a disappointing earnings report.