(November 20) – “Fidelity Investments doesn’t seem to be giving telecom stocks a ringing endorsement,” writes John Hechinger in today’s Wall Street Journal.

“During the third quarter, the No. 1 mutual-fund company sold off big chunks of Nortel Networks, Nokia and Lucent Technologies, according to a quarterly Securities and Exchange Commission filing, which outlines Fidelity’s holdings as of Sept. 30.”

“In one of the most significant moves, Fidelity stock pickers unloaded 35.6 million shares of Nortel, leaving the firm with 82.7 million shares. That decision reduced the value of Fidelity’s Nortel holdings by $2.1 billion between the end of the second and third quarters, according to TF/Carson Group Inc., a New York firm that tracks the holdings of institutional investors. Managers sold 51.6 million shares of Nokia, about half of their stake, also a $2.1 billion reduction.”

“At the same time, Fidelity stock pickers plugged into handheld computer maker Palm, snapping up 36.7 million shares, bringing Fidelity’s total holdings to 40.4 million shares, a $1.9 billion increase in value. Palm was Fidelity’s biggest purchase in the third quarter, according to TF/Carson.”

“Closely held Fidelity doesn’t talk about what stocks it is buying and selling, but with $978 billion in assets, its moves emit plenty of market tremors, so investors closely scrutinize its filings for clues about its thinking.”

” ‘ It’s Fidelity’s shopping list,’said Jim Lowell, editor of the newsletter Fidelity Investor. Mr. Lowell said Fidelity managers probably sold telecommunications stocks because of concerns about price wars and market saturation.”

“At the same time, Mr. Lowell said Fidelity is betting on personal-computing devices as the next step of the technological revolution — rather than the old-line personal-computer makers. He noted that Fidelity Magellan Fund manager Robert Stansky recently disclosed that the fund had bought one million shares of Palm, a new position.”

“But Fidelity cautioned about drawing too many conclusions from public filings. ‘Each fund manager makes individual decisions,’ a spokesman said. ‘At any given time, one fund manager may be buying and another may be selling.’ “