The most comprehensive picture of what hedge funds are doing comes in the form of quarterly 13F filings, and we have shown that this information can be used to develop profitable investing strategies. For example, the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy). However, some investors prefer more up to date information about what funds are doing and a small piece of their movements can be tracked through 13D and 13G filings, which are published with the SEC after a fund buys over 5% of the outstanding shares of a stock or makes significant changes to that position. Investors can then do further research on any interesting names out of these initial ideas. Here are five stocks that hedge funds have bought recently:
Lone Pine Capital, which is managed by billionaire and Tiger Cub Stephen Mandel, has increased its stake in Workday Inc (NYSE:WDAY) to a total of 3.5 million shares or 9% of the company. See Mandel’s stock picks. This was up from just under 1 million shares at the beginning of January. Workday has been seeing large increases in revenue, but operating losses have increased as well. There has been something of an improvement in operating margins, but even according to Wall Street analysts the company is a long way away from profitability- losses per share are supposed to be about even between this fiscal year and the next one.
Post Holdings Inc (NYSE:POST), the $1.4 billion market cap cereal manufacturer, had Adam Weiss and James Crichton’s Scout Capital Management initiate a position of 2.3 million shares since the beginning of 2013 (research more stocks Scout likes). Currently Post Holdings Inc (NYSE:POST) trades at 33 times its trailing earnings, a high valuation for a stable packaged foods company; earnings per share actually declined in its most recent quarter compared to the same period in the previous year, so it doesn’t look like a good value to us. Cash flow multiples don’t look particularly good either, with an EV/EBITDA multiple close to 11x.