What a Week: Stocks Get Oil Change

Some of the new place-holder positions are positions in well-known companies like ChevronTexaco (CVX Quote), Wachovia (WB Quote) and Black & Decker (BDK Quote).

But most are in more obscure small- or mid-cap names like patio furniture maker Trex (TWP Quote). The company, with a market cap under $1 billion, often gets beaten up for short-term losses during hurricanes season only to rebound a few months later. MGP Ingredients (MGPI Quote) makes the raw materials for pet chews and vegetarian meat substitutes. It's poised to benefit from lower grain prices.

Danoff likes to attend as many meetings as he can with corporate execs and sometimes finds himself the only Fidelity manager showing for a session with an unknown CEO. As a result, he buys more IPOs than many large fund managers. Among his small positions were Greenfield Online (SRVY Quote), an Internet survey firm that went public in July, biotech Idenix Pharmaceuticals (IDIX Quote) and Westlake Chemical (WLK Quote).

The greatest number of the new small positions are in the fields of energy, machinery and metals and mining, giving some insight into where Danoff is looking for new ideas. They include Oil States International (OIS Quote) and Pason Systems, which trades on the Toronto Stock Exchange, in the energy patch; AGCO (AG Quote) and SPX (SPW Quote) among machinery manufacturers, miner Meridian Gold (MDG Quote) and steel company Gerdau SA (GGB Quote).

Although by Fidelity policy, Danoff doesn't discuss individual holdings (thanks to a little $10 million settlement the firm paid over long-ago comments by Jeff Vinik), those three sectors are certainly poised to benefit from higher oil and commodity prices and a weaker dollar.

Of course Danoff also initiated much larger new positions in the third quarter, like a purchase of almost 1 million shares of Google (GOOG Quote) or $100 million worth of railroad stocks Burlington Northern (BNI Quote), Canadian National, another Toronto Exchange stock, and Norfolk Southern (NSC Quote).

In those cases, it may be too late to follow Danoff's bets. The seed stocks provide potentially richer feed for the portfolios of small investors.