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Can a Stumbling Clipper Regain Its Stride?

A close look at Morningstar's only 1-star Analyst Pick.

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 Clipper (CFIMX) managers Chris Davis and Ken Feinberg are on the hot seat.

From the managers' Jan. 1, 2006 start at Clipper through April 12, 2011, the fund lost 0.38% annualized, while the S&P 500 gained 3.13% and the typical large-blend fund advanced 2.75%. The fund has done better since the March 9, 2009, bottom of the bear market, rising nearly 48% annualized through April 12, more than 8 percentage points better than the S&P 500 Index and nearly 10 percentage points better than the large-blend category.

Still, the fund is now Morningstar's only Analyst Pick with a 1-star rating, and many wonder which is the real Clipper--the crashing one or rallying one. Davis and Feinberg's track record since 1994 at  Davis New York Venture (NYVTX) suggests the rallying one, but let's dig in.

Dan Culloton has a position in the following securities mentioned above: CFIMX. Find out about Morningstar’s editorial policies.