This Mid-Blend Fund Seeks Diamonds in the Rough
Silver-rated First Eagle Fund of America has driven strong returns by rooting out companies with unrecognized potential.
Greg Carlson: This week's Morningstar Medalist is First Eagle Fund of America (FEAFX). This fund resides in Morningstar's mid-blend category. However, the overall portfolio tends to own a mix of mid- and large-cap stocks. The managers typically buy mid-cap stocks; however, a lot of their winners will blossom into large-cap territory, and they continue to hold on for the long haul as long as things work well. So, you might say that they start out as value investors but end up holding some stocks that are classified as growth stocks, such as Valeant Pharmaceuticals (VRX), for example, which is a biotech company.
They invest in companies that are undergoing corporate change. These typically are companies that have had management changes or some type of restructuring. They also look for companies that have some sort of hidden asset that hasn't been recognized by the market.
Greg Carlson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.