Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Apple Inc. (NASDAQ:AAPL).
Apple Inc. (NASDAQ:AAPL) was in 145 hedge funds’ portfolios at the end of the third quarter of 2016. AAPL investors should be aware of an increase in enthusiasm from smart money recently. There were 116 hedge funds in our database with AAPL holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly valued stocks. That’s why at the end of this article we will examine companies such as Alphabet Inc (NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT) to gather more data points.
In the eyes of most stock holders, hedge funds are seen as slow, outdated investment tools of yesteryear. While there are more than 8000 funds in operation at the moment, Our experts hone in on the bigwigs of this group, about 700 funds. These money managers command the lion’s share of all hedge funds’ total asset base, and by tracking their first-class investments, Insider Monkey has uncovered a number of investment strategies that have historically outstripped the market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in its back tests.
Keeping this in mind, we’re going to take a peek at the latest action regarding Apple Inc. (NASDAQ:AAPL).
What have hedge funds been doing with Apple Inc. (NASDAQ:AAPL)?
At Q3’s end, a total of 145 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the second quarter of 2016. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).