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Fidelity's Biggest Stock Picks Going Into 2011

BOSTON (TheStreet) -- Fidelity literally means "loyalty," and that's what the largest U.S. mutual-fund company paid to its top two stock picks in 2010, as indicated by the combined $25 billion invested in Apple (AAPL) and Google (GOOG).

Apple, the maker of the iPad tablet and iPhone smartphone, and Internet search engine Google held down the biggest positions in a ranking of the Boston-based company's $579 billion stock portfolio at year-end for the second year in a row.

Last year, Apple was the biggest, and in 2009 it was Google, according to data collected on Fidelity's 177 equity mutual-fund portfolios, based on reports issued by the privately held firm as recently as Oct. 30, and summarized by Morningstar.

Apple had a portfolio value of $15 billion, representing 2.6% of Fidelity's investable equity assets, up 66% from 2009, an increase aided by stock purchases and Apple's 54% share-price appreciation last year. Fidelity owns 5.6% of Apple's outstanding shares, making it the largest shareholder.

Google's combined current $10 billion allocation is down 1% from 2009 to 1.7% of the portfolio, due in part to Google shares' 3.4% decline as well as some minor selling. Fidelity owns 4.5% of Google's shares and is the biggest shareholder.

The S&P 500 Index was up 15% in 2010.

A review of the top 50 stocks owned by Fidelity funds shows, most notably, that there has been big buying of a handful of high-tech firms, including Salesforce.com (CRM), Oracle (ORCL), eBay (EBAY), Broadcom (BRCM) and NetApp (NTAP), as well as of two big oil companies, Exxon Mobil (XOM) and Chevron (CVX).

Among the bigger bets was online auctioneer eBay, now the 33rd largest Fidelity holding. Its valuation rose 102% in the Fidelity portfolio to $1.9 billion. The firm, with a $36 billion market values, was up 19% last year. Fidelity owns 7% of its outstanding shares, the most of any other company.

Notably absent from the top 50 stocks are two of the year's hottest S&P 500 companies: F5 Networks (FFIV), up 150%, and Netflix (NFLX), up 227%.

Chevron, now 0.76% of assets to rank seventh, is up from 22nd in 2009 due to a 43% rise in value to $3.6 billion, including a 19% increase in its share price.

Fast-food giant McDonald's (MCD) has seen a 49% increase in portfolio value to $3.5 billion, giving it a ranking of eighth, up from 24th in 2009. The increase was helped by a 23% rise in its shares, and lots of buying by Fidelity.

Another firm vaulting into the top 10, due to a 34% gain in its portfolio value, was business-software provider Oracle. It has a valuation of $3.4 billion, or 0.74% of assets, giving it a ranking of ninth, up from 21st at the start of the year. Its shares advanced 28% last year.

Maintaining their top 10 rankings are banker Wells Fargo (WFC), fourth, at 1.09%, worth $5.2 billion, a 20% decline from 2009 when it was ranked third; beverage giant Coca-Cola (KO), fifth with a 0.92% allocation at $4.3 billion, up 10% in value from in 2009 when it ranked eighth, helped by a 14% rise in its shares; investment banker JPMorgan Chase (JPM), is in sixth place at $4 billion, up 29% last year when its shares rose 1.3%; and computer-hardware firm Cisco Systems (CSCM), in 10th at $3.3 billion, down 16%, hurt by its 16% share-price decline.

Among the companies that lost their top 10 status are: software giant Microsoft (MSFT), ranked No. 5 in 2009, but 16th now, due to a 44% tumble in its investment, to $2.8 billion, including an 8.6% decline in its stock; Procter & Gamble (PG), ninth at the end of 2009, but down to 15th now, representing a 19% decline in value to $2.8 billion even as the consumer-products maker's shares rose 6%; Hewlett-Packard (HPQ), sixth in 2009, down to 48th last year, on a 38% drop in value to $2.6 billion, dragged down by the company's 18% share-price slide; and drugmaker Pfizer (PFE), 10th in 2009 and 39th now, representing a 37% decline in its value to $2.2 billion, including a 3.9% decline in its share-price value.

Fidelity Management & Research is a privately owned investment manager with $1.5 trillion in assets under management as of Sept. 30. The following is a synopsis of five of the stocks in Fidelity's company-wide portfolio:

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