It’s a little-known fact that stock performance is not evenly distributed (i.e. you don’t have a 50/50 chance of picking a market-beating stock). In fact, despite the S&P 500 gaining about 5.2% between November 1, 2014 and October 30, 2015, less than 49% of the stocks in the index beat the market during that time. In contrast, the 30 stocks from the index which were the most popular among the investors that we track returned 9.5% during that time and 63% of them beat the market. This shows that while hedge funds get a lot of flak from the mainstream media for their performance, it can be rewarding to follow their moves using the right sets of data. The data, though, shows that following the collective wisdom of select hedge funds can be a very wise move overall.
Tesla Motors Inc (NASDAQ:TSLA) was in 29 hedge funds’ portfolios at the end of December. TSLA investors should pay attention to an increase in support from the world’s most elite money managers in recent months. There were 26 hedge funds in our database with TSLA positions 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 Yahoo! Inc. (NASDAQ:YHOO), Luxottica Group SpA (ADR) (NYSE:LUX), and Emerson Electric Co. (NYSE:EMR) to gather more data points.
According to most shareholders, hedge funds are viewed as worthless, outdated investment tools of years past. While there are more than 8000 funds trading at present, Our experts choose to focus on the bigwigs of this club, about 700 funds. These hedge fund managers handle the lion’s share of the hedge fund industry’s total capital, and by observing their highest performing stock picks, Insider Monkey has formulated numerous investment strategies that have historically exceeded the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per annum for a decade in their back tests.