10 Most Popular Stocks Among Hedge Funds

Where's chipotle?

I wonder about the impact on these figures by high frequency shops holding huge inventories with no long position? It would make sense for them to apply their efforts to the most liquid stocks, and these fit the bill..

'managed to beat the market by around 2 percentage points annually. It isn’t too much but it sure is better to buy these stocks in your IRA account than an index fund'.

The compounded impact of an additional 2% is huge if this is repeated over any period of time, particualrly in the sideways markets of the last decade

What does popularity have to do with anything? These happen to be many of the BIGGEST stocks around. Of course they would be popular if you have many billions of dollars lying around that you need to invest. Cant put everything in to the higher growth mid sized/smaller companies/distressed plays.

No Facebook.

This list is only about liquidity

Insider Monkey:

We have been tracking the most popular stocks among hedge funds for more than a year now. Hedge funds are known to be short-term oriented but when we look at the most popular stocks among hedge funds we see that they are focused on the long-term more than expected. Apple (AAPL) and Microsoft (MSFT) have been among the top three most popular stocks since at least the end of 2010 (see the 10 most popular stocks at the end of September). This is consistency and both stocks outperformed the market over the last year. For the past two quarters Google (GOOG) joined them. Even George Soros bet more than $150 million on the stock. We are bullish about Google as well. In fact mega-cap technology stocks are trading at very low forward price multiples compared to the market. Apple will probably make around $40 per share in 2012. The stock has more than $100 per share in net cash, so its 2012 price-earnings ratio is a paltry 10 excluding cash. This is a stock that is expected to increase its earnings by nearly 20% for the next 5 years. On the other hand utility stocks that are expected to grow at less than 5% annually have P/E ratios around 13-14.

Hedge funds’ message cannot be clearer. Technology stocks are undervalued and sooner or later the rest of the market will recognize this. Hedge funds are also buying mega-cap banks. Citigroup (C) is the most popular financial stock followed by Bank of America (BAC) and JP Morgan (JPM). Warren Buffett’s favorite Wells Fargo (WFC) is the fourth most popular bank and ranks ninth overall. Another stock that is trading at a ridiculously low multiple is David Einhorn’s favorite General Motors (GM). For the past 10 years hedge funds’ top 10 stock picks managed to beat the market by around 2 percentage points annually. It isn’t too much but it sure is better to buy these stocks in your IRA account than an index fund. Check out the rest of the list yourself. This list is based on the fourth quarter 13F filings of 375 hedge funds and prominent stock pickers followed by Insider Monkey. Here are the 10 most popular stocks among hedge funds:

1. Apple: 127 hedge funds, $16 billion

2. Google: 108 hedge funds, $10.9 billion

3. Microsoft: 95 hedge funds, $6 billion

4. Citigroup: 92 hedge funds, $4.8 billion

5. Bank of America: 85 hedge funds, $2.3 billion

6. General Motors: 80 hedge funds, $2.2 billion

7. JP Morgan: 79 hedge funds, $4.6 billion

8. Pfizer (PFE): 69 hedge funds, $3.5 billion

9. Wells Fargo: 68 hedge funds, $15.3 billion

10. Qualcomm (QCOM): 64 hedge funds, $4.1 billion

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Indeed some analysts believe that apple will close they year at 600 dollars, it's still a hot stock the 100 billion dollars in cash is one of several good fundamentals it has, of course the biggest company in the world will ultimately suffer from the law of diminishing returns, but that won't happen soon. Bank of America has good fundamentals, but in the short term it will have face the messy problem of the mortgage portfolio, JPM is the best of the all 6 big banks, it has great potential too. The Citi I don't know, it is considered by some analysts as black box. BAC is suitable for HFT, high volume and cheap, I guess APPL don't meet all the criteria for HFT.