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Most Popular Stocks Among Hedge Funds: Part 2 – Apple, Pfizer & More

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In the first part of the article, we covered the five most popular stocks among the funds in our database. As we mentioned, the latest round of 13F filings showed some interesting developments related to the smart money investors’ sentiment towards several stocks. During the fourth quarter, investors chose to pile into tech stocks that showed strong results last year. Let’s move on to the second part and discuss the other five stocks that ranked as the most popular among the investors we track as of the end of December. As stated in the first part, Apple Inc. (NASDAQ:AAPL), which ranked on the second spot last quarter, moved down to the seventh position, as the number of funds remained unchanged. Another highlight is the advancement of Pfizer Inc. (NYSE:PFE) into the top 10.

The main reason why we are following these investors is because our research showed that imitating the most popular small-cap picks among them can generate substantial returns over the long term. Our analysis that covered the equity portfolios of several hundred hedge funds showed that this approach can help a retail investor beat the market by double digits annually (see more details here).

As stated earlier, Apple Inc. (NASDAQ:AAPL) has slid five spots from the second spot in our ranking that it held at the end of September. During the fourth quarter, the number of funds bullish on the stock remained unchanged at 133, so the fall in popularity came on the back of more funds taking up positions in other stocks. However, the aggregate value of the positions held by the funds from our database in Apple Inc. (NASDAQ:AAPL) appreciated to $17.72 billion from $17.41 billion over the quarter. Apple’s stock has declined by 12% since the end of September, which has pushed its dividend yield to 2.16%, while its forward P/E currently stands at 9.5, which makes the stock extremely cheap. Investors are concerned about the slowdown of the iPhone’s sales growth, but they should not forget that Apple Inc. (NASDAQ:AAPL) has a strong balance sheet and is committed to returning capital to shareholders. Billionaire Carl Icahn’s Icahn Capital sold 7.0 million shares of Apple during the fourth quarter, reporting 45.76 million shares held in its latest 13F filing. On the other hand, Chase Coleman‘s Tiger Global Management initiated a stake in Apple, which contains 10.60 million shares as of the end of December.

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Two financial stocks ranked among the ten most popular and Bank of America Corp (NYSE:BAC) was one of them, as it registered a total of 112 funds from our database holding its shares, which had a total value of $6.80 billion, which was up from 108 funds with stakes worth $6.45 billion a quarter earlier. Harris Associates reported holding almost 138.90 million shares of Bank of America Corp (NYSE:BAC) as of the end of December, while Ken Fisher’s Fisher Asset Management reported ownership of 43.09 million shares. Amid a broader market selloff, Bank of America Corp (NYSE:BAC)’s stock plunged by 27%. For the last quarter of 2015, Bank of America posted adjusted EPS of $0.29, which beat the consensus estimate of $0.26. Its total revenue of $19.53 billion rose by 4.3% on the year. However, the bank also increased its provision for credit losses, as a drop in oil prices and concerns about a slowdown of economic growth in China put more pressure on the credit markets.

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