The most complete picture of what hedge funds and other major investors own comes in the form of 13F filings, but the drawback to this information is that it tends to be months old before it is released. More up-to-date information comes in the form of 13D and 13G filings; the drawback to these is that they are only filed when a fund takes or changes a large percentage stake. This is not particularly common, and extremely rare among large cap stocks. However, we think that reviewing these filings can still serve as a list of suggestions that investors can then review further. Here are five stocks that hedge funds and other institutional investors have recently reported buying:
Tiger Cub Robert Karr and his team at Joho Capital filed with the SEC to disclose ownership of almost 1 million shares of Yelp Inc (NASDAQ:YELP). 60% of Yelp’s outstanding shares are held short, and some insiders have been selling (see a history of insider sales at Yelp); while these aren’t necessarily strong points for bears, they are concerning. Wall Street analyst consensus is for only 2 cents per share in earnings for Yelp in 2013, and the core business may receive additional competition from Facebook Inc (NASDAQ:FB)’s new Social Graph feature in the sense that it will allow Facebook users to see their connections’ favorite local businesses (which may be more trusted than a consensus of strangers).
Billionaire Ken Griffin’s Citadel Investment Group owns over 5% of Express, Inc. (NYSE:EXPR) after reporting a position of 4.8 million shares. This is up from 1.4 million shares in the fund’s portfolio at the end of September (find Griffin’s favorite stocks). The stock has rebounded from its lows, however, and has risen 22% so far this year; Citadel has likely already made a substantial profit on its investment. Express trades at 12 times trailing earnings, but same-store sales were down considerably in its most recent quarter versus a year earlier and net income fell 47%. The five-year PEG ratio is 0.6 as Wall Street analysts are optimistic about the future.
Read on for more picks including Dreamworks: