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Five Tech Stocks That See Billionaires Piling On

Technology and healthcare are two industry sectors that have managed to generate outsized returns for investors over the years. Their continuous outperformance has also ensured that they are the dominant sectors in equity portfolios of several billionaires. During the third quarter, when stocks across the board got beaten down, technology and healthcare stocks also experienced some pain. However, while the healthcare sector is still to recoup most of the losses it made during that period, the technology sector has made a phenomenal recovery and is already above the levels it was at during the third quarter. The S&P North American Technology Sector Index (INDEXSP:SPGSTI) recently has reached its lifetime high, breaking the 467 mark, and is currently trading close to that level. Considering the outperformance that the technology sector has displayed and its popularity among billionaire investors, we at Insider Monkey have compiled a list of tech stocks that billionaire investors were piling on going into the fourth quarter.

Most investors don’t understand hedge funds and indicators that are based on hedge funds’ activities. They ignore hedge funds because of their recent poor performance in the bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns experienced by investors. We uncovered that hedge funds’ long positions actually outperformed the market. For instance the 15 most popular small-cap stocks among funds beat the S&P 500 Index by more than 80 percentage points since the end of August 2012. These stocks returned a cumulative of 102% vs. 49% gain for the S&P 500 Index (read the details). That’s why we believe investors should pay attention to what hedge funds are buying (rather than what their net returns are).

#5 Priceline Group Inc (NASDAQ:PCLN)

Billionaires with Long Positions (as of September 30): 14

Aggregate Value of Billionaires’ Holdings (as of September30): $2.56 Billion

Shares of the online reservation service provider Priceline Group Inc (NASDAQ:PCLN) slumped hard in the final week of November after the US State department issued a global travel warning in view of the Paris terrorist attack. However, they have recovered since then and now trade up by almost 17% year-to-date. Although the number of billionaire investors tracked by Insider Monkey that reported owning a stake in Priceline Group Inc (NASDAQ:PCLN) jumped by two during the third quarter, the aggregate value of investors’ holding in the company declined by over 34% during the same time. For the third quarter of fiscal 2015 the company posted EPS of $25.35 on revenue of $3.10 billion versus analysts’ expectations of EPS of $24.23 on revenue of $3.05 billion. Billionaire Stephen Mandel‘s reduced its stake in the company by 17% to slightly under 1.0 million shares, but still remained the largest shareholder of Priceline Group among the funds covered by us at the end of September.

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#4 Amazon.com, Inc. (NASDAQ:AMZN)

Billionaires with Long Positions (as of September 30): 15

Aggregate Value of Billionaires’ Holdings (as of September30): $7.95 Billion

With its shares more than doubling this year, it is not surprising that the e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN) made the list. During the third quarter, when Amazon.com, Inc. (NASDAQ:AMZN)’s stock rose almost by 18%, the number of billionaires covered by us with a long position in the stock rose by four and the aggregate value of their holdings saw an astonishing increase of 90%. On Monday, the company announced that two and a half-years after launching in India, its Indian subsidiary ‘Amazon.in’ became the most visited e-commerce site in the country, as of October 2015. Billionaire  Andreas Halvorsen‘s Viking Global increased its stake in the company by 33% to 3 million shares during the July-September period.

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#3 Facebook Inc (NASDAQ:FB)

Billionaires with Long Positions (as of September 30): 18

Aggregate Value of Billionaires’ Holdings (as of September30): $3.57 Billion

Moving on, social media behemoth Facebook Inc (NASDAQ:FB)’s stock is currently trading very near to its lifetime high and is already up 18% this quarter. It seems elite investors had already anticipated this move and that’s why two more billionaire investors reported a stake in the company as of the end of September compared to the previous quarter. Moreover, the aggregate value of billionaires’ holdings in Facebook Inc (NASDAQ:FB) also saw a sharp jump of 21.2% during that period. The company has quietly launched a new service recently that allows Facebook users to find the best local services in their areas based on ratings and reviews. Billionaire David E. Shaw‘s D.E. Shaw boosted its stake in Facebook by 270% to over 4.7 million shares during the third quarter.

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#2 Microsoft Corporation (NASDAQ:MSFT)

Billionaires with Long Positions (as of September 30): 18

Aggregate Value of Billionaires’ Holdings (as of September30): $7.47 Billion

After remaining sideways for more than a year, shares of Microsoft Corporation (NASDAQ:MSFT) broke the $50 mark for the first time in history in the fourth quarter and are currently trading comfortably above the $55 mark. Meanwhile, during the third quarter, the number of billionaire investors bullish on the stock went up by four. Recently in a Bloomberg interview, Microsoft’s former CEO, Steve Ballmer, criticized CEO Satya Nadella’s strategy of not revealing the revenue the company generates from its Cloud operations and not allowing Android apps to run on Windows 10 devices. Billionaire Ken Fisher‘s Fisher Asset Management was one of the funds that reduced its stake in Microsoft during the third quarter to slightly under 18 million shares.

#1 Apple Inc. (NASDAQ:AAPL)

Billionaires with Long Positions (as of September 30): 18

Aggregate Value of Billionaires’ Holdings (as of September30): $10.35 Billion

Apple Inc. (NASDAQ:AAPL) continued to remain billionaire investors’ most loved technology stock at the end of the third quarter with four more billionaire investors among those tracked by Insider Monkey revealing a stake in the company and aggregate value of their holdings in the company increasing by almost $500 million during the third quarter. After falling below the $120 mark in July, shares of the company have found it hard to go above it ever since and are currently trading flat for the year. In the past few weeks there has been rumor going around the Street that Apple Inc. (NASDAQ:AAPL) might be interested in acquiring adventure camera maker GoPro Inc (NASDAQ:GPRO). Yesterday analysts at Robert W. Baird reiterated their ‘Buy’ rating on the stock, but lowered their price target on it to $155 from $150. Billionaire activist investor Carl Icahn‘s Icahn Capital LP remained the largest shareholder of Apple among the funds covered by us with ownership of 52.76 million shares of the company.

Disclosure: None

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