Goldman Sachs recently touted 13 stocks it says are the favorites of hedge funds.
To be sure, the baker’s dozen are soundly outperforming the market this year.
The firm added the 13 new names to its hedge fund VIP list after analyzing the positions of 821 hedge funds with total long and short stock holdings of $1.9 trillion, CNBC reported.
Four times a year, hedge funds file their long positions with the SEC and the information is released to the public 45 days after each quarter ends. Goldman's current hedge fund VIP list consists of the 50 stocks that "appear most often among the top 10 holdings of fundamentally-driven hedge fund portfolios" for the March quarter, CNBC reported. The bank analyzed the positions of 821 hedge funds with total long and short stock holdings of $1.9 trillion.
"Our Hedge Fund VIP list of the most popular long positions has outperformed the S&P 500," strategist Ben Snider wrote in a note to clients. "From an implementation standpoint, the hedge fund VIP list represents a tool for investors seeking to 'follow the smart money' based on 13-F filings."
The firm's basket of the top holdings of hedge funds is up 10 percent this year through May 18 versus the S&P 500's 7 percent return.
Here are the 13 picks:
- Allergan (AGN)
- Mead Johnson (MJN)
- Adient (ADNT)
- Athene (ATH)
- Marathon Petroleum (MPC)
- Salesforce (CRM)
- DXC Technology (DXC)
- JD.com (JD)
- Monsanto (MON)
- Mobileye (MBLY)
- Gilead (GILD)
- Humana (HUM)
- Pioneer Natural (PXD)
Meanwhile, several big-name hedge fund investors trimmed their stakes in financial companies in the first quarter as hopes for immediate tax cuts and loosening of regulations after President Donald Trump’s victory in November began to fade.
Boston-based Adage Capital Management cut its position in Wells Fargo & Co, which has come under fire for its sales practices, by 3.9 million shares, according to regulatory filings, while John Burbank’s Passport Capital cut its stake in the company by 947,000 shares,
Reuters reported.
Third Point cut its stake in JPMorgan Chase & Co by 28 percent, to 3.75 million shares, while Suvretta Capital Management sold all of its shares of Morgan Stanley, JPMorgan Chase and Citigroup Inc.
Overall, financial companies in the S&P 500 were up 2.1 percent in the first quarter, compared with 5.5 percent for the index as a whole. Financials significantly outperformed the broad market following Trump's Nov. 8 election.
Trump had pledged to do a "big number" on the landmark Dodd-Frank financial reform law, which raised banks’ capital requirements and restricted their ability to make speculative bets with customers’ money. The Treasury Department is still filling vacancies and will not be able to complete a review of the law by Trump’s June deadline, sources told Reuters.
(Newsmax wire services contributed to this report).
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