Fund Managers See Big Earnings, Growth for Sycamore Networks
Updated from 3:15 p.m. EDT
Who knew how many fund managers were tree-huggers?
Many fund managers have loved Sycamore Networks (SCMR) since they first laid eyes on it in October. They expected Thursday's earnings report to only make their passion more fervent.
In its stunning Oct. 22 debut, the fiber-optic networking shop's stock shot up a stunning 486%. Since then the highflier in perhaps the hottest sliver of the tech/telecom sector has kept heading north as fund managers have gobbled up its shares, most of which are still held by insiders at the Chelmsford, Mass.-based company.On Thursday night Sycamore announced its fiscal fourth-quarter results, which exceeded expectations. But it's not necessarily all blue skies for the company that still depends on telecommunications shop Williams Communications (WCG) for most of its revenue and sells at a pie-in-the-sky price. One in three tech funds already own shares in the young company. Fund managers betting on the sweeping transition from Old School electrical communications networks to more powerful and efficient fiber-optic networks are plowing money, more specifically your money, into Sycamore and its competitors. There's a good chance you own the stock through one or more funds given some managers' unbridled enthusiasm. "Sell the house, sell your car, it's the world's greatest stock," Mark Sunderhuse of Denver-based Berger Funds says semi-facetiously. Kidding aside, he and his colleagues are clearly smitten. "We got involved at the IPO and I think it's in all of our funds, except (BEBAX)Balanced." If you own one of Sunderhuse's funds he's put your money where his mouth is. He co-manages two of the 10 funds with the biggest bet on the stock as of June 30: (BESLX)Berger Select, where Sycamore is the fund's top holding and a whopping 11.4% position, and (BEMGX)Berger Mid Cap Growth with a 2.3% position. On June 30 the stock was also among the top-10 holdings of the (BENGX)Berger New Generation fund, which he manages on his own.
|Deep Roots |
These 10 funds have the biggest bet on Sycamore.
|Fund||% Assets in Sycamore||YTD Return|
|(POGSX)Pin Oak Aggressive Stock||4.2||50.7|
|(IPOSX)IPO Plus Aftermarket||3.5||3.6|
|(IPTAX)IDEX Pilgrim Baxter Technology||3||N/A|
|(PBTCX)PBHG Technology & Communications||2.6||15|
|(HGEAX)Heritage Growth Equity||2.4||16.4|
|(DTGRX)Dreyfus Premier Technology Growth||2.4||19.1|
|(BEMGX)Berger Mid Cap Growth||2.3||10.5|
|Source: Morningstar. Holdings as of most recent public portfolio. Performance figures through Aug. 22.|
|A Sycamore Grows in Mutual Funds |
These funds haven't been shy about gobbling up Sycamore shares.
|Fund||Shares Bought||Portfolio Date|
|(FMAGX)Fidelity Magellan||2,439,000||March 31|
|(PBTCX)PBHG Technology & Communications||561,000||March 31|
|(DTGRX)Dreyfus Premier Technology Growth||525,000||June 30|
|(VWVSX)Vanguard U.S. Growth||495,000||March 31|
|(VEXMX)Vanguard Extended Market Index||356,000||March 31|
|Trimming Sycamore |
The funds selling Sycamore aren't dumping many shares.
|Fund||Shares Sold||Portfolio Date|
|(MANTX)Merrill Lynch Internet Strategies||64,000||June 30|
|(HGEAX)Heritage Growth Equity||10,000||May 31|
|(HTEAX)Heritage Technology||9,000||June 30|
|(FRGDX)Dreyfus Founders Growth||5,000||March 31|
|(IPTAX)IDEX Pilgrim Baxter Technology||1,000||May 31|
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