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Is Fidelity Low-Priced Stock (FLPSX) a Strong Mutual Fund Pick Right Now?

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If you've been stuck searching for Mid Cap Value funds, consider Fidelity Low-Priced Stock (FLPSX - Free Report) as a possibility. FLPSX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Mid Cap Value funds is an area filled with options, like FLPSX. Targeting medium-sized companies with a market cap between $2 billion and $10 billion, Mid Cap Value mutual funds more often than not choose stocks that hold solid value and income investment opportunities.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FLPSX. Since Fidelity Low-Priced Stock made its debut in December of 1989, FLPSX has garnered more than $29.53 billion in assets. The fund's current manager is a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. FLPSX has a 5-year annualized total return of 11.09% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.26%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, FLPSX's standard deviation comes in at 8.83%, compared to the category average of 10.11%. Looking at the past 5 years, the fund's standard deviation is 9.01% compared to the category average of 10.02%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In FLPSX's case, the fund lost 48.88% in the most recent bear market and outperformed its peer group by 2.7%. This could mean that the fund is a better choice than comparable funds during a bear market.

Nevertheless, investors should also note that the fund has a 5-year beta of 0.84, which means it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. FLPSX has generated a negative alpha over the past five years of -0.04, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FLPSX is a no load fund. It has an expense ratio of 0.67% compared to the category average of 1.18%. So, FLPSX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.

Bottom Line

Overall, Fidelity Low-Priced Stock has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Low-Priced Stock looks like a good potential choice for investors right now.

For additional information on the Mid Cap Value area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FLPSX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.




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