STX - Fidelity Low-Priced Stock Fund Q2 2024 Review
2024-07-29 09:30:00 ET
Summary
- Fidelity Contrafund is a large-cap growth biased equity strategy focused on companies with durable multiyear earnings growth potential.
- Fidelity Low-Priced Stock Fund uses an opportunistic approach in seeking undervalued stocks.
- For the second quarter, the fund's Retail Class shares returned -1.93%, outpacing the -3.28% result of the benchmark, the Russell 2000 Index.
- The fund's outperformance of the benchmark in Q2 primarily reflects stock selection, especially in the information technology sector.
Investment Approach
- Fidelity® Low-Priced Stock Fund uses an opportunistic approach in seeking undervalued stocks. It focuses mostly on small- and mid-cap companies, including overseas. Most holdings have share prices below $35 per share or an earnings yield at or above the median for the Russell 2000® Index. (The earnings yield is the inverse of the price-earnings (P/E) ratio; a high earnings yield means a low P/E ratio.)
- Our investment process is based on the belief that many low-priced stocks are mispriced. Mispricings are especially likely to occur in businesses that seem boring and out of favor, or which require careful analysis.
- We seek to buy higher-quality companies with stable growth prospects that trade at a discount to our estimate of intrinsic (fair) value.
- Where the gap between price and value is especially compelling, we may invest in firms whose near-term prospects appear challenged. We cast a wide net, and many holdings are outside of the fund's benchmark.
- We invest with a long-term time horizon and global perspective, seeking to deliver attractive risk-adjusted returns. To help manage risk, we look for understandable businesses that are resilient and growing, with honest and capable management, purchased at a modest price.