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

If you've been stuck searching for Mid Cap Value funds, consider Fidelity Low-Priced Stock (FLPSX) as a possibility. FLPSX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various 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 $22.99 billion in assets. Morgen Peck is the fund's current manager and has held that role since May of 2016.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. FLPSX has a 5-year annualized total return of 9.76%, and is 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 14.48%, which places it in the middle third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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. The standard deviation of FLPSX over the past three years is 12.35% compared to the category average of 11.77%. The standard deviation of the fund over the past 5 years is 14.38% compared to the category average of 13.74%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 0.76, so investors should note that it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -0.83, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FLPSX is a no load fund. It has an expense ratio of 0.65% compared to the category average of 0.98%. So, FLPSX is actually cheaper than its peers from a cost perspective.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

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

This could just be the start of your research on FLPSX in the Mid Cap Value category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.

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