Were Hedge Funds Right Betting On These Stocks in Q4?

#3 Alphabet Inc (NASDAQ:GOOGL) (Class A)

-Hedge Funds with Long Positions (as of September 30): 129

-Aggregate Value of Hedge Funds’ Holdings (as of September 30): $11.3 billion

Alphabet Inc (NASDAQ:GOOG) (Class C)

-Hedge Funds with Long Positions (as of September 30): 119

-Aggregate Value of Hedge Funds’ Holdings (as of September 30): $10.18 billion

The second half of 2015 marked the period in which both classes of Alphabet’s stock broke their two year monotonous phase and shot through the roof. After rising by 18.20% and 16.88%, respectively, during the third quarter, Alphabet’s class A and class C stocks again jumped by 21.87% and 24.73%, respectively, during the fourth quarter largely led by the great results the company reported during these periods. At the same time, during the third quarter, the number of funds long Alphabet’s class C stock went up by 12, and 14 more funds reported bullish stakes in the company’s class A stock.

In spite of this rapid rise, shares of Alphabet are currently trading at a forward price-to-earnings multiple of 20.97, which although might seem a little rich when taken at face value, but is significantly lower compared to where a lot of tech and internet stocks currently trade at. According to a recent report from eMarketer, revenue from display ads will overtake revenue from search ads in 2016. Experts believe that even though this shift might not be an imminent problem for Alphabet, it can become a cause of concern for the company going forward.

On December 28, analysts at Axiom Securities reiterated their ‘Buy’ rating on Alphabet’s stock, while upping their price target to $1,000 from $900. Andreas Halvorsen‘s Viking Global reduced its stake by 8% to 2.53 million class A shares and trimmed its class C position by 2% to 1.12 million shares during the third quarter of 2015.