10 Most Popular Stocks Among Hedge Funds (Part 2)

Last week, we revealed the first half of our list of the 10 most popular stocks among hedge funds. In this article we’ll run through five more stocks that have elite money managers’ attention. Many hedge funds have started posting better returns in 2017 amid growing pressure from investors, who have begun to question the logic of putting their money into the $1 trillion hedge fund industry given its high fees and recent mediocre performance.

Several hedge funds have rebounded from uncharacteristically weak performance in recent years to beat the market in 2017. Billionaire Daniel Loeb recently told investors that his fund Third Point Ultra Ltd climbed 3.5% in May. Similarly, Bill Ackman’s Pershing Square climbed 2.4% in the same period, compared to the broader S&P 500’s 1.4% gain.

At Insider Monkey, we track insider trading and hedge fund activity to uncover actionable patterns and profit from them. We track over 700 of the most successful hedge funds ever in our database and identify only their best stock picks. Hedge funds are like many other companies in that they bundle products (in this case, stock picks) together and sell them to customers (investors) as a package deal. That means you get their 73rd-best pick along with their best pick, and who wants to pay exorbitant fees for a fund’s 73rd-best idea when you could instead invest in only their best ideas? Our flagship strategy has gained 44% since February 2016 and our stock picks released in the middle of February 2017 gained over 5 percentage points in the three months that followed. Our latest stock picks were released last month, which investors can gain access to by becoming a subscriber to Insider Monkey’s premium newsletters.

Now then, let’s check out the back-half of our list of the 10 most popular stocks among hedge funds, beginning with Comcast.

10. Comcast Corporation (NASDAQ:CMCSA)

As of the end of March, 101 hedge funds in our database were long Comcast Corporation (NASDAQ:CMCSA), up from 97 funds a quarter earlier, ranking it as the tenth-most popular stock among the hedge funds that we track. America’s largest cable provider had 22.55 million cable television accounts as of the end of March, while its Xfinity internet service is popular among cord cutters. Comcast’s Theme Parks business is also flourishing. In 2015, Universal Studios resorts were the third-most attended parks, with 44.9 million visitors. As of the end of March, Alex Snow’s Lansdowne Partners owns 39.41 million shares of Comcast Corporation (NASDAQ:CMCSA).

Head to the next page to see which company ranked as the ninth-most popular among hedge funds.

9. Visa Inc (NYSE:V)

Visa Inc (NYSE:V) was in the portfolio of 110 hedge funds tacked by Insider Monkey as of the end of the first quarter, while the collective worth of hedge funds’ positions in the payments company amounted to over $12.24 billion. The company is still exhibiting a strong growth rate and flourishing business prospects, processing transactions worth $1.8 trillion in the first quarter of 2017, helped by its recent reacquisition of Visa Europe. Last week, investment firm Wedbush upped its price target on Visa Inc (NYSE:V) to $100, 5% above the stock’s current price. Billionaire Warren Buffett owns 10.56 million shares of Visa as of March 31, shares which have gained about 19% since the start of 2017.

8. Citigroup Inc (NYSE:C)

As of the end of the first quarter, 112 hedge funds in our database held $9.8 billion worth of Citigroup Inc (NYSE:C) shares, ranking the stock as the eighth-most popular among the smart money. Citigroup has finally rid itself of the effects of the financial crisis, thanks to exerting strong control over its expenses. Last week, Citigroup surged after UBS analyst Saul Martinez abandoned his bearish thesis on the stock, upping his rating on it to ‘Neutral’ from ‘Sell’ and raising his price target on it to $64. Mr. Martinez had previously asserted that Citigroup wasn’t in a position to leverage expected tax cuts, higher interest rates, and economic growth, hopes for the latter of which are rapidly fading. According to FactSet analysis, about 43.1% of Citi’s revenue comes from the U.S. Natixis Global Asset Management’s Harris Associates reported owning 41.13 million shares of Citigroup Inc (NYSE:C) as of the end of March.

7. Apple Inc. (NASDAQ:AAPL)

Hedge fund interest in Apple Inc. (NASDAQ:AAPL) remained at the same level as it was a quarter earlier, as 113 funds tracked by Insider Monkey held long stakes in the company valued at $30.9 billion. Apple’s stock got hammered on Monday after Mizuho’s Abhey Lamba downgraded the stock to ‘Neutral’ over concerns about Apple’s valuation. He thinks that the enthusiasm around the iPhone 8 is already baked into the current stock price. Lamba also thinks that Apple might not be able to expand its user base with the iPhone 8 amid its hefty price tag (which is expected to tip the scales at $1,000). Warren Buffett’s Berkshire Hathaway owns 129.36 million shares of Apple Inc. (NASDAQ:AAPL) as of the end of the first quarter.

6. Charter Communications, Inc. (NASDAQ:CHTR)

A total of 114 hedge funds in our database are bullish on Charter Communications, Inc. (NASDAQ:CHTR) as of the end of March, a jump from 103 funds a quarter earlier. Charter Communications reported revenue of $10.2 billion for the first quarter, missing the consensus estimate of $10.3 billion. While Deutsche Bank lowered its price target on Charter Communications to $390 from $400 last month, it maintained its ‘Buy’ rating on it. The firm thinks that Charter has a strong free cash flow growth profile over a levered capital structure. A recent report suggests that Charter Communications rebuffed a $100 billion buyout offer from Verizon Communications Inc. (NYSE:VZ). Stewart Strawbridge’s Selkirk Management owns 34,800 shares of Charter Communications, Inc. (NASDAQ:CHTR) as of March 31.

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