10 New Stocks on All-Star Fund Managers' List

BOSTON (TheStreet) -- Who better to take investment cues from than some of the highest-rated mutual fund managers around?

Their buying habits should provide some direction for investors trying to decide how to play the shaky market this year after a bang-up first quarter and the desultory results since then.

According to a report Tuesday by fund-rating firm Morningstar, the first-quarter activities of the 26 top mutual fund managers it tracks in its Ultimate Stock Pickers series "tells us that our managers were anticipating an end to the run-up in the markets" so they built up cash to meet potential redemption requests, and perhaps also to keep some powder dry for future purchases if the market regains some semblance of normality.

And that conservative stance came during one of the strongest first-quarter performances for the S&P 500 in over a decade when it returned 12%. The index has since lost ground and is now up 5.7% on the year.

Morningstar's analysts sift through the quarterly reports of these elite funds it tracks in order to identify their top new buys, sells or changes to existing positions.