Contrarian Ideas at Fidelity Growth & Income
Manager Tim Cohen looks for opportunity in beaten-down stocks.
Editor's note: This is part of a continuing series of articles looking at the 20 biggest no-load stock funds.
In Tim Cohen’s world, bad news is often good news. “I like to look for bad news in the newspapers and on Wall Street for potential ideas,” says Cohen, who took over Fidelity Growth & Income in October 2005 after generating four years of stellar results at Fidelity Export & Multinational. One of Growth & Income’s top holdings is Home Depot (symbol HD), which Cohen thinks investors have beaten down below its true value. "A lot of people are afraid to own anything related to housing," he says. "But in my opinion, this is where some of the best values in the market are now."
Cohen is a buy-and-hold investor who favors companies that pay dividends and generate plenty of free cash flow. Beyond that, he invests wherever he finds the best opportunities. At present, that includes many blue-chip growth companies, such as eBay (EBAY) and Google (GOOG). "For every stock I look at, I think what will it will do in the next three to four years and if I can get 50% to 100% appreciation," Cohen says. Although he generally invests with the idea of holding companies "indefinitely," Cohen doesn’t always gravitate to long-term stories. "Sometimes bad companies offer exceptional upside without much risk," he says.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The fund invests 10% to 15% of assets in foreign companies. These are what Cohen describes as "best in class" companies in global industries. "It’s never a call on a specific country," he says. "Bottom-up stock-picking tends to lead me to the best stories located outside of the U.S." At last report, Growth & Income’s foreign holdings include Swiss pharmaceutical giant Roche and Irish biotechnology firm Elan.
Cohen’s bets on such stocks as Home Depot and eBay have led to sluggish results so far. Growth & Income’s 9% return over the past year trails that of the S&P 500 by five percentage points. Although Cohen is one of Fidelity’s rising stars, we’d prefer to see a longer record at Growth & Income before endorsing the fund. Current investors should HOLD it.
FUND FACTS
Fidelity Growth & Income ( FGRIX )
Assets: $30.6 billion
Manager (year started): Tim Cohen (2005)
Returns (vs. S&P 500)*
Year to date: 9.6% (14.1%)
One year: 9.4% (14.3%)
Three years annualized: 9.8% (12.7%)
Five years annualized: 3.9% (6.0%)
Ten years annualized: 7.4% (8.6%)
Expense ratio: 0.69%
Portfolio turnover: 120%
Initial minimum investment: $2,500
Phone: 800-544-8544
Web site: www.fidelity.com
*Returns through Dec. 11.
Fund Fact sources: Standard & Poor's, Morningstar
View updated data for this fund and compare the performance of the 20 biggest no-load stock funds.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
April RMD? Five Tax Strategies to Manage Your 2025 Income
Taxable Income The April 1, 2025, deadline for required minimum distributions (RMDs) is fast approaching for retirees who turned 73 in 2024.
By Kelley R. Taylor Last updated
-
Rising AI Demand Stokes Undersea Investments
The Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
By John Miley Published
-
Stock Market Today: Markets Celebrate Trump's Tariff Détente
Consumer discretionary stocks led 10 of the 11 S&P 500 sector groups well into the green.
By David Dittman Published
-
Stock Market Today: Stocks Enjoy a Fed Day Relief Rally
The question now is whether Jerome Powell and other policymakers can get the balance right given all the new noise.
By David Dittman Published
-
Stock Market Today: Stocks Skid Into Another Risk-Off Turn
The promise of the AI revolution can't overcome flickering hopes for a "Fed put."
By David Dittman Published
-
Home Depot's Winning Ways Fueled Its 100,000% Return
Home Depot's wide moat leaves little room for competition – and shareholders have profited as a result.
By Louis Navellier Published
-
Stock Market Today: Mixed Messages Muddle Markets
Stocks cruised into pre-market action on encouraging news for the AI revolution but stumbled on yet another policy disturbance.
By David Dittman Published
-
eBay Stock Slides on Soft Outlook
eBay stock is falling Thursday after the e-commerce company topped fourth-quarter expectations but issued a soft first-quarter outlook.
By Joey Solitro Published
-
Stock Market Today: Stocks Pop on Time-Delayed Tariffs
All three major U.S. equity indexes rallied to intraday highs following President Trump's latest trade moves.
By David Dittman Published
-
Stock Market Today: Markets Turn Lower on Nasty Inflation Surprise
Equities sold off after a hot reading on consumer price inflation pushed back rate cuts to autumn or year-end.
By Dan Burrows Published