The most popular small cap stocks among hedge funds tend to outperform the S&P 500 by an average of 18 percentage points per year, according to our historical analysis of 13F filings (learn more about imitating hedge funds’ small cap stock picks). We also like to study what hedge fund managers and other notable investors own according to their 13Fs, which disclose many long equity positions as of the end of the last fiscal quarter (so current 13Fs, filed in February, provide information from December). While blindly following these stock picks often isn’t a good idea, we think that it can be useful for investors to see a short list of top stock picks and then decide if they are worth further research- much like how many investors treat stock screens. Here are the five largest holdings by market value from Tiger Cub Patrick McCormack’s Tiger Consumer Management’s 13F (or see the full list of stocks the fund reported owning):
Tiger Consumer’s top pick was Google Inc (NASDAQ:GOOG), reporting a position of over 190,000 shares. Google Inc (NASDAQ:GOOG) made our list of the most popular stocks among hedge funds for the fourth quarter of 2012, as measured by the number of funds which included it in their portfolio (find more stocks hedge funds loved). The company experienced a 7% increase in earnings last quarter compared to the fourth quarter of 2011, as search growth overcame the addition of Motorola Mobility Holdings. The integration of Motorola provides a source of potential improvement for Google Inc (NASDAQ:GOOG).
The fund owned 2.8 million shares of Kraft Foods Group Inc (NASDAQ:KRFT) at the end of December. Kraft operates as a North American-based food and beverage company following the breakup of the larger Kraft company into Kraft Foods and Mondelez International Inc (NASDAQ:MDLZ). Each of these was among hedge funds’ favorite consumer goods stocks according to our database of 13F filings (read our list of the ten most popular consumer goods stocks). Analyst consensus for 2014 implies a forward P/E of 16, which is in line and perhaps a bit cheaper than where many other packaged food companies trade.
See three more of Tiger Consumer’s stock picks, including a leading home improvement store: