Our data team at Insider Monkey has finished the monumental task of pouring through the 13F filings of each of the 730 hedge funds in our database (or at least, those which filed for the latest reporting period) and collating the results to provide us with a wealth of data on the activity of hedge funds during the first quarter. We’ve covered the new top five stocks of hedge funds, which witnessed the surprise dethroning of Apple Inc. (NASDAQ:AAPL) as the hedge funds’ favorite stock.
Now we’ll take a look at the five stocks which had the greatest number of funds buy into them during the first quarter (disregarding merger arbitrage stocks like Pharmacyclics, Inc. (NASDAQ:PCYC), which get a lot of hedge fund activity). Unsurprisingly, the company that unseated Apple as the top hedge fund pick was one of the hottest stock picks during the quarter, while several tech giants also ranked as hot commodities.
Let’s start with Citizens Financial Group Inc (NYSE:CFG), which had the largest gain in our database with overall fund ownership rising by more than 150% to 76 from 30, while invested capital nearly doubled to $2.33 billion from $1.17 billion. Royal Bank of Scotland, which bought Citizens Financial Group Inc (NYSE:CFG) in 1988, spun off a 25% ownership interest of the company into a separate publicly traded entity in September of last year and plans to divest itself of the US retail bank holding company by the end of 2015 (due to pressure from the U.K government to raise capital). Shares have gained 22% since its IPO and the stock still trades at a price-to-book ratio of just 0.73. Citizens Financial Group Inc (NYSE:CFG) also pays out a quarterly dividend of $0.10 with a yield of 1.52%, making it an attractive investment on several levels.
The large amount of activity in the stock during the first quarter likely coincides with the end of the IPO lockup agreement on March 23 that placed restrictions on major shareholders and the end of which would have enabled many more investors to find shares to purchase. As such, the new fund ownership total should be taken with a slight caveat that the rise probably more accurately reflects the interest in the stock from the beginning, rather than new interest in it. Nonetheless, it is undoubtedly the biggest surprise to make the list. Some of the funds with new stakes in Citizens Financial Group Inc (NYSE:CFG) include Brian Jackelow’s SAB Capital Management and John Khoury’s Long Pond Capital.
JD.Com Inc(ADR) (NASDAQ:JD) also had an IPO in 2014, though the lockup period on its shares ended in late November. The Chinese online direct-sales company then had a secondary share offering in December, which left plenty of shares for new investors to open positions in the stock during December and January. Those shares were certainly coveted by the hedge funds in our database during the first quarter, with 68 of them reporting ownership positions totaling $8.23 billion. That compared to just 32 funds with holdings in the stock totaling $4.68 billion at the end of 2014. The bullish hedge funds have been right on the mark with JD.Com Inc(ADR) (NASDAQ:JD), as shares have risen by nearly 50% year-to-date and 15% during the second quarter after all of those new positions had been established. The company is proving particularly attractive to Tiger Cubs, with Tiger Global, Maverick Capital, Hoplite Capital, Coatue Management, and Stephen Mandel’s Lone Pine Capital all having positions in JD.Com Inc(ADR) (NASDAQ:JD).