We finally finished processing 13F filings from 821 hedge funds and prominent investors. We believe one of the best tools for ordinary investors who are on the hunt for new ideas is 13F filings. Once every quarter hedge funds with at least $100 million in total positions in publicly traded US stocks, options, and convertible debt are required to open the kimono and disclose the number of shares and the total value of its positions in each of the stocks and options in its portfolio. We now know which stocks hedge funds were piling into during the coronavirus crash.
Hedge funds hire some of the smartest Ivy League graduates as their analysts, have access to industry insiders whom they “consult” with, unconventional data sources that cost tens of thousands of dollars, years of experience and millions of dollars as incentives to come up with the next great investment idea. Every quarter we process around 800 hedge funds’ 13F filings to identify each hedge fund’s new moves, top stock picks, and more importantly overall sentiment changes towards each of the 4000 stocks that are publicly trading. We publish all of our analysis in our premium quarterly newsletter (download a free sample), and then share interesting bits and pieces on our website.
Earlier today we published the list of 30 most popular stocks among hedge funds. This article is a condensed version of the original article and focuses on the top 10 stock picks.
The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed crappy information by other media outlets about hedge funds’ poor performance.
It is true that hedge fund investors, i.e. those people who hand their hard earned dollars to hedge fund managers, underperform because hedge funds charge huge fees and they hedge their bets. Hedge funds also invest in a diversified portfolio of good and bad ideas. By focusing on the top stock picks among all hedge funds, we have been able to identify some of the best stocks to buy in the market for years. The top 10 most popular stocks among hedge funds beat the S&P 500 Index by more than 109 percentage points over the last 5.5 years.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. We saw the coronavirus crash coming (see this article). Several hedge funds saw it too and they flocked into the following 10 stocks:
10. Apple Inc. (NASDAQ:AAPL): $313
Number of Hedge Funds: 123
Total Dollar Amount of Long Hedge Fund Positions:$74.8 billion
Percent of Hedge Funds with Long Positions: 15.0%
Second Quarter Return (through May 19th): 23.5%
Popularity Ranking (Q4): 11
Noteworthy Hedge Fund Shareholders: Warren Buffett, Ken Fisher
9. Bristol-Myers Squibb (NYSE:BMY): $63
Number of Hedge Funds: 126
Total Dollar Amount of Long Hedge Fund Positions:$6.9 billion
Percent of Hedge Funds with Long Positions: 15.3%
Second Quarter Return (through May 19th): 13.4%
Popularity Ranking (Q4): 10
Noteworthy Hedge Fund Shareholders: Jim Simons, Cliff Asness
8. Mastercard Incorporated (NYSE:MA): $291
Number of Hedge Funds: 139
Total Dollar Amount of Long Hedge Fund Positions:$11.9 billion
Percent of Hedge Funds with Long Positions: 16.9%
Second Quarter Return (through May 19th): 20.5%
Popularity Ranking (Q4): 9
Noteworthy Hedge Fund Shareholders: Tom Russo, Charles Akre
7. Alphabet Inc. (NASDAQ:GOOG): $1,373
Number of Hedge Funds: 147
Total Dollar Amount of Long Hedge Fund Positions:$15.3 billion
Percent of Hedge Funds with Long Positions: 17.9%
Second Quarter Return (through May 19th): 18.1%
Popularity Ranking (Q4): 6
Noteworthy Hedge Fund Shareholders: Boykin Curry, David Blood and Al Gore
6. Visa Inc. (NYSE:V): $189
Number of Hedge Funds: 157
Total Dollar Amount of Long Hedge Fund Positions:$14.4 billion
Percent of Hedge Funds with Long Positions: 19.1%
Second Quarter Return (through May 19th): 17.7%
Popularity Ranking (Q4): 7
Noteworthy Hedge Fund Shareholders: Ken Fisher, Warren Buffett
Top 5 Stocks Among Hedge Funds:
We recently launched a YouTube channel and created a video listing the top 5 stocks among hedge funds. We will be sharing a few interesting videos every week, so please subscribe to our YouTube channel if you like our video below: