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Here is the #4 Stock Among Hedge Funds

·5 分鐘文章

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don't make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Alphabet Inc (NASDAQ:GOOGL) to find out whether there were any major changes in hedge funds' views.

Is Alphabet Inc (NASDAQ:GOOGL) a healthy stock for your portfolio? Investors who are in the know were taking a bullish view. The number of bullish hedge fund bets rose by 5 recently. Alphabet Inc (NASDAQ:GOOGL) was in 195 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 190. This means the bullish number of hedge fund positions in this stock currently sits at its new all time high. Our calculations also showed that GOOGL ranked #4 among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 190 hedge funds in our database with GOOGL holdings at the end of June.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we're going to check out the recent hedge fund action encompassing Alphabet Inc (NASDAQ:GOOGL).

Chris Hohn's top 10 stock picks
Chris Hohn's top 10 stock picks

Chris Hohn of TCI Fund Management

Do Hedge Funds Think GOOGL Is A Good Stock To Buy Now?

At third quarter's end, a total of 195 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the previous quarter. By comparison, 162 hedge funds held shares or bullish call options in GOOGL a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Citadel Investment Group was the largest shareholder of Alphabet Inc (NASDAQ:GOOGL), with a stake worth $5812.8 million reported as of the end of September. Trailing Citadel Investment Group was Fisher Asset Management, which amassed a stake valued at $4912.5 million. TCI Fund Management, Arrowstreet Capital, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Fosse Capital Partners allocated the biggest weight to Alphabet Inc (NASDAQ:GOOGL), around 30.86% of its 13F portfolio. Immersion Capital is also relatively very bullish on the stock, designating 21.41 percent of its 13F equity portfolio to GOOGL.

Now, key hedge funds have been driving this bullishness. Harvard Management Co, managed by Rick Slocum, established the largest position in Alphabet Inc (NASDAQ:GOOGL). Harvard Management Co had $163.3 million invested in the company at the end of the quarter. Jason McDougall's 11 Capital Partners also initiated a $40.1 million position during the quarter. The other funds with brand new GOOGL positions are Paul Tudor Jones's Tudor Investment Corp, Benjamin A. Smith's Laurion Capital Management, and Steven Boyd's Armistice Capital.

Let's go over hedge fund activity in other stocks similar to Alphabet Inc (NASDAQ:GOOGL). We will take a look at Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:FB), Tesla Inc. (NASDAQ:TSLA), Berkshire Hathaway Inc. (NYSE:BRK-B), Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM), NVIDIA Corporation (NASDAQ:NVDA), and JPMorgan Chase & Co. (NYSE:JPM). This group of stocks' market values resemble GOOGL's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMZN,242,42553102,-29 FB,248,38569582,-18 TSLA,60,10645154,0 BRK-B,106,19463815,-10 TSM,67,9511459,3 NVDA,83,10050216,-3 JPM,101,5635067,-7 Average,129.6,19489771,-9.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 129.6 hedge funds with bullish positions and the average amount invested in these stocks was $19490 million. That figure was $28555 million in GOOGL's case. Meta Platforms, Inc. (NASDAQ:FB) is the most popular stock in this table. On the other hand Tesla Inc. (NASDAQ:TSLA) is the least popular one with only 60 bullish hedge fund positions. Alphabet Inc (NASDAQ:GOOGL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GOOGL is 92.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately GOOGL wasn't nearly as successful as these 5 stocks and hedge funds that were betting on GOOGL were disappointed as the stock returned 6.2% since the end of September (through 11/30) and matching the market's return. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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