Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Is Goldman Sachs Group, Inc. (NYSE:GS) the right investment to pursue these days? The best stock pickers are turning less bullish. The number of bullish hedge fund positions decreased by four during the fourth quarter. GS was in 59 hedge funds’ portfolios at the end of December. There were 63 hedge funds in our database with GS 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 priced stocks. That’s why at the end of this article we will examine companies such as American International Group Inc (NYSE:AIG), QUALCOMM, Inc. (NASDAQ:QCOM), and U.S. Bancorp (NYSE:USB) to gather more data points.
At the moment there are tons of tools that stock traders put to use to appraise their holdings. A pair of the most underrated tools are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can beat the broader indices by a very impressive margin (see the details here).
Goldman Sachs’ stock has slid by 19% over the last 52 weeks, so before we take a closer look at the smart money sentiment, let’s see the latest developments surrounding the stock.