Sit Mid Cap Growth Gets New Energy; Doesn't Stand Around; Manager trims Murphy and adds Southwestern, Noble as well as Tesoro.(MUTUAL FUNDS)

Byline: KEN HOOVER

Sit Mid Cap Growth Fund has done well last year and this year in large part because of the success with investments in energy stocks. Manager Gene Sit is still high on energy, although he's changed his mix of companies in that highflying sector.

"We saw in 2003 that supply and demand imbalances were going to be more acute than in the past, with China and India growing and even Russia coming back," said Sit.

He and his team of analysts saw the growth of supplies rising slowly, but world demand, brought about by the economic recovery and the new players in Asia, growing much faster.

Valero Energy, XTO Energy, BJ Services, Nabors Industries and Noble have been big winners for the $207 million fund.

XTO, in particular, has helped drive performance. Sit bought it in 2003 with an average price of 12.34. The stock now trades in the low 40s. The Fort Worth, Texas-based firm is a top producer of natural gas and also produces oil in East Texas, Oklahoma and Midwestern states along with Alaska and the Gulf of Mexico. The IBD 100 stock (see Monday's edition), with an Earnings Per Share Rating of 96 and a Relative Strength Rating of 94, appreciated to become a top fund holding.

But Sit has been selling off some of his energy holdings. In the third quarter, he sold nearly $1.4 million of his Valero and nearly $900,000 of Murphy Oil, which has lagged other oil companies.