At a time when the major indexes are in bull market territory, shares of Electronic Arts Inc. (NASDAQ:EA), Alibaba Group Holding Ltd (NYSE:BABA), Netflix, Inc. (NASDAQ:NFLX), NVIDIA Corporation (NASDAQ:NVDA), and AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) are also trading in the green. In the following article, we will examine why investors are buying and selling these stocks and also examine the latest hedge fund activity in them.
Hedge funds have been underperforming the market for a very long time. However, this was mainly because of the huge fees that hedge funds charge as well as the poor performance of their short books. Hedge funds’ long positions performed actually better than the market. Small-cap stocks, activist targets, and spin offs were among the bright spots in hedge funds’ portfolios (read the details here). This strategy also managed to beat the market by double digits annually in our back tests covering the 1999-2012 period.
Electronic Arts Inc. (NASDAQ:EA) shares are up by 1.5% today after the recent announcement of its online subscription service for some of its top PC games. In recent days, analysts at Bank of America also upgraded the company to ‘Buy’ from ‘Neutral’, slapping 20% upside potential on the stock. Electronic Arts Inc. (NASDAQ:EA) gained popularity among the investors that we track in the third quarter. 51 funds held shares of the company on September 30, up by four over the quarter, and they amassed 11.3% of the float. Among them, Stephen Mandel‘s Lone Pine Capital was the largest shareholder, reporting a position of 8.78 million shares in its latest 13F filing.
Moving on, Alibaba Group Holding Ltd (NYSE:BABA) shares are up by 0.52% today after the company opened a new store in a Free Trade Zone in North China, to boost sales of imported products into that country. Among the funds that we follow, 60 reported long positions in Alibaba Group Holding Ltd (NYSE:BABA) as of the end of September, down by 25 from a quarter earlier and they amassed 2.6% of the float. Among those funds from our database that were long the stock was Boykin Curry‘s Eagle Capital Management, with a stake of 8.1 million shares.