There are a lot of people that think hedge fund filings are delayed and hedge funds can’t even beat the market. They say tracking hedge funds is useless. Guess what? Our small-cap hedge fund strategy returned 55.6% over the last 11 months and beat the S&P 500 index by 33 percentage points. We know how to interpret these filings. Don’t let their ignorance stop you from achiving superior stock returns.
At Insider Monkey, we follow 525 of the hedge fund industry’s 8,000 plus managers, and many members of this top tier are guys you’ve heard of, like Warren Buffett and David Einhorn. Others, like T. Boone Pickens (energy) or Larry Robbins (healthcare), are experts in their respective niches.
With that being said, one of the most important ways to parse aggregate hedge fund data is to track the number of elite hedge funds invested in each U.S. listed stock. Think of this as a type of “consensus hedge fund sentiment,” where only the most accomplished fund managers have a vote.
Last quarter, Apple Inc. (NASDAQ:AAPL) was the No. 1 stock pick among hedge funds. In Q2 2013, things have changed a bit. Let’s take a look:
1. Google Inc (NASDAQ:GOOG): 157 hedge funds, a 9-fund increase from the first quarter.
2. American International Group Inc (NYSE:AIG): 137 hedge funds, a 9-fund decrease from Q1.
3. Apple Inc. (NASDAQ:AAPL): 122 hedge funds. This is a whopping 26-fund drop from the total number of “hedgies” invested at the end of Q1. George Soros still has a position in Apple, among other big names.
4. General Motors Company (NYSE:GM): 121 hedge funds, an increase of 11 funds from the first quarter. David Einhorn still has a massive position in the stock, and in his Q2 2013 shareholder letter, he mentioned that Greenlight Capital expects “a period of rapid earnings acceleration” to begin in the back-half of this year.
5. Citigroup Inc (NYSE:C): 119 hedge funds, an increase of 1 fund over the quarter.
6. JPMorgan Chase & Co (NYSE:JPM): 92 hedge funds, a slight drop of 2 funds.
7. Microsoft Corporation (NASDAQ:MSFT): 92 hedge funds, an increase of 3.
8. Visa Inc (NYSE:V): 90 hedge funds, up from 88 in Q1. Warren Buffett has a position here.
9. QUALCOMM, Inc. (NASDAQ:QCOM): 88 hedge funds, down from 96 in the previous quarter.
10. Hertz Global Holdings, Inc. (NYSE:HTZ): 83 hedge funds, a 15-fund increase from Q1.