While the likes of Allergan plc Ordinary Shares (NYSE:AGN) and Alphabet Inc (NASDAQ:GOOGL), constantly make the headlines and especially after the release of the hedge funds’ 13F filing, some stocks tend to slip under the radar, despite a surge in interest from top hedge fund managers. Warren Buffett‘s big bet on Apple Inc. (NASDAQ:AAPL) was analyzed from every angle, but what other stocks have registered the largest increase in the number of long hedge fund positions? Let’s find out.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).
Despite worries about its ability to maintain the growth rate of its leading products, Apple Inc. (NASDAQ:AAPL) attracted a number of new long positions from top hedge funds. Among the funds tracked by Insider Monkey, 152 have reported a stake in the tech giant at the end of the first quarter, up from 133 a quarter earlier. Berkshire Hathaway’s $1.06 billion bet on Apple made headlines for two reasons. First, Warren Buffett doesn’t usually invest in tech stocks and in this case it seems one of his lieutenants made the move, with Buffett’s consent of course. Secondly, long term fan and supporter of Apple, Carl Icahn dumped his entire position during the quarter. Only time will tell who made the right call. Apple Inc. (NASDAQ:AAPL) has recently announced a $1 billion investment in Didi Chuxing Technology Co, China’s response to Uber. Although Apple did not offer a rationale for its decision, it is possible that the investment is set to complement the company’s efforts to enter the car market, with reports circulating that Apple is working on an autonomous electric vehicle. Uber has also shown interest in self-driving vehicles, while General Motors is preparing to test a fleet of self-driving taxis.
Healthcare Merger Play
A diversified healthcare company, Centene Corp (NYSE:CNC) was also among the stocks that attracted a large number of new bets. At the end of the first quarter, 47 elite funds reported long positions in the stock, up from 27 at the end of the fourth quarter of 2015. Harris Associates, run by Natixis Global Asset Management, established a fresh position and acquired roughly 1.99 million shares of Centene Corp (NYSE:CNC) during the quarter. The stake is reportedly worth $122.8 million and is the largest among the funds followed by Insider Monkey. So far this year, the stock has been trending sideways, hovering around the $60 level. The company’s mixed first quarter results did not help either. Revenues rose by 36% year-over-year to $6.95 billion, but were below analysts’ estimate of $7.28 billion. Centene Corp (NYSE:CNC) also reported a profit of $0.74 per share, one cent above the consensus.