By Alex Oleinic and Meena Krishnamsetty
Hedge funds are done with disclosing their long equity US portfolios. We have analyzed the equity portfolios of over 640 hedge funds that we track at Insider Monkey and selected the 5 most popular stocks at the end of March. Our research shows that most popular small cap stocks outperformed the market by 18 percentage points between 1999 and 2009. In the last 21 months these stocks also managed to beat the S&P 500 by more than 44 percentage points. One of the main highlights of the first quarter's top ten list is the decline in Apple Inc.'s (NASDAQ:AAPL) popularity. Apple had been among the top three for at least the past 3 years. Now the stock sits at the sixth spot.
Technology and Automotive Rule the Day
The most popular stocks among hedge funds are usually larger-cap names and these stocks usually perform worse than the small-cap stocks. Historically, these stocks outperformed the market by a couple of percentage points. In this article we will share the list of top 5 stocks, though you can take a look at the complete list of 10 most popular stocks among hedge funds here.
An interesting development was Google's (NASDAQ:GOOGL) increase in rankings. The company gained the first spot on the list with 149 hedge funds out of 644 reporting ownership of its shares. As of the end of last year, 170 funds held the company in their equity portfolios. Boykin Curry's Eagle Capital Management is one of the largest hedge funds tracked by us that revealed ownership of Google shares, although it has inched down its stake by 2,600 shares, currently holding close to 797,300 shares, worth $889 million. On the other hand, D. E. Shaw seems to be more confident regarding the company's prospects, boosting its position by more than 75% to $716 million.
General Motors Company (NYSE:GM) is the second most stock among hedge funds. Overall, 147 hedge funds reported holding stakes in the company, versus 183 in the previous quarter. Some of the largest investors have been limiting their exposure to General Motors during the first three months of the year. Warren Buffett's Berkshire Hathaway sold 10.0 million shares of its holdings. David Einhorn's Greenlight Capital sold out its entire holding in General Motors, which earlier amassed almost 10% of its equity portfolio and contained 17.05 million shares.
Next on the list is Microsoft Corporation (MSFT). There were 131 funds with long Microsoft positions, significantly more than the 120 hedge funds that reported positions in the stock at the end of 2013. Bart Baum's Ionic Capital Management is among hedge funds that initiated a position in Microsoft. Jeff Ubben's ValueAct is also bullish on Microsoft Corporation, raising the stake by 4.42 million shares to 71.29 million shares, valued at $2.92 billion.
Financials are still in trend
Citigroup Inc (C) moved up one spot from the fifth place, despite the number of hedge funds with Citigroup positions going down from 143 at the end of 2013. Billionaire Ken Fisher's Fisher Asset Management is the investor with the largest stake out of those we track, holding 11.07 million shares with a reported value of $527 million. David Tepper's Appaloosa Management, on the other hand, purchased 400,000 shares of Citigroup, and currently owns 10.08 million shares.
Finally, American International Group Inc (AIG) is the fifth most popular stock among hedge funds. There were 130 hedge funds with AIG positions at the end of March. As it was in the past several quarters, Bruce Berkowitz's Fairholme is among the largest shareholders with a $3.78 billion stake. Alex Snow's Lansdowne Partners has closed its position in American International Group, which previously contained 922 thousand shares.
Disclosure: I am long C, AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.