Hedge fund billionaires are known for two things: Making highly profitable investments that frequently outperform market averages and pushing stocks higher behind huge trading size and volume.
So when the top names in the industry make bold moves into new investment ideas, legions of big and small investors across the world follow very closely to try to catch a little bit of that hedge fund magic.
And that's exactly what happened in early November, when the latest batch of 13F filings hit the Street. The 13F is a quarterly report of equity holdings that financial institutions with at least $100 million in assets under management are required to file with the Securities and Exchange Commission (SEC). The report is an incredibly valuable tool offering great insight into portfolio adjustments the most powerful hedge funds in the world make.
In the latest iteration of these closely-watched reports, more than a few central themes have emerged and a handful of companies are gaining attention. Here are five stocks that saw huge capital inflows from the biggest hedge funds in the world during the third-quarter, making them prime candidates for big gains in coming months.
1. Yahoo! Inc.
Yahoo! Inc. (NASDAQ:YHOO) is in full turn-around mode after poaching top Google Inc (NASDAQ:GOOG) executive Marissa Meyer for the CEO position in July. There's no doubt Meyer will be sharing and implementing Google's highly effective search and growth strategies at Yahoo!, which has generated huge interest from the hedge fund community. That includes David Einhorn of Greenlight Capital, the billionairehedge fund manager who has made headlines after scoring huge gains shorting Chipotle Mexican Grill, Inc. (NYSE:CMG) and Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR). Einhorn initiated a stake in Yahoo! during the third-quarter, with Greenlight's 13F filing revealing the fund had purchased 5 million shares ranging between $14.65 and $16.23 a share.
Facebook Inc (NASDAQ:FB) was also a common buy among some of the biggest names in the hedge fund world, led by Charles Coleman's $8 billion Tiger Global Management. Coleman has earned the reputation as a master Facebook trader, after creating a venture capital vehicle to accumulate shares of the social networking giant at discount prices long before its IPO in April of 2012. He then proceeded to unload one-third of his holdings on the day of Facebook's IPO for a hefty $715 million profit. Now, Coleman's latest move, revealed through Tiger Global's third-quarter 13F filing, was to pump up his Facebook position from 2 million to 11 million shares. There's no doubt that had a lot to do with Facebook's stock dropping as much as 50% since its IPO, enticing fellow hedge fund master Paul Tudor Jones II to buy 100,000 shares of his own.