Goldman Sachs (GS) recently published its quarterly Hedge Fund Trend Monitor report and ranked stocks based on the number of hedge funds with top 10 holdings. The good thing about this ranking is that it only considers hedge funds’ highest-conviction stock picks. Historically, these stocks have managed to beat the market by more than 2 percentage points annually. Here are the most popular stocks among hedge funds.
1. Apple (AAPL): More hedge funds – in fact, 105 – had Apple among their top 10 picks than any other stock last quarter. Collectively hedge funds owned 4% of the total outstanding AAPL stock. Apple was also the most popular stock at the end of second quarter.
2. Google (GOOG): Fifty-eight hedge funds had Google among their top 10 holdings. Hedge funds collectively own 4% of Google’s outstanding shares.
3. Microsoft (MSFT): Fifty hedge funds had Microsoft among their top 10 holdings. Microsoft was the second most popular stock at the end of second quarter; however, some fund managers, including Larry Robbins, Curtis Macnguyen and John Levin, sold their entire stake in the company.
4. JPMorgan Chase (JPM): Thirty-one hedge funds had JPM among their top 10 holdings. JPM is the only financial stock in Goldman’s top 10 listing. Citigroup (C) was actually the most popular stock among hedge funds at the end of first quarter, but it now ranks 17th. Bank of America (BAC), which was one of the most favorite stocks earlier this year, isn't among the top 50 most popular stocks anymore.
5. Pfizer (PFE): Twenty-nine hedge funds had PFE among their top 10 holdings. Pfizer is also losing its popularity recently. David Einhorn sold Greenlight’s $483 million position in the stock during the third quarter. Billionaire David Tepper sold out his $300 million position.
6. Qualcomm (QCOM): Twenty-nine hedge funds had QCOM among their top 10 holdings. Rob Citrone’s Discovery Capital initiated a brand new $172 million position in QCOM during the third quarter. Brookside Capital also had a brand new $138 million position in QCOM as well. Technology stocks are clearly favored by hedge funds.
7. General Motors (GM): Twenty-eight hedge funds had GM among their top 10 holdings. David Einhorn boosted his stake in the stock by 331% during the third quarter. He now has $300 million in the stock. Not everybody is bullish about the automaker, though. Howard Marks sold out his $110 million position.
8. LyondellBasell (LYB): Twenty-four hedge funds had this specialty chemicals maker among their top 10 holdings. Andreas Halvorsen had more than $300 million in the stock at the end of September. On the other hand, Dan Loeb sold his $150 million position to fund his $600 million Yahoo (YHOO) bet. Yahoo ranks 27th in popularity among hedge funds.
9: Liberty Interactive Corp (LINTA): Twenty-two hedge funds had LINTA among their top 10 holdings. Value investor David Abrams has the largest stake in LINTA among the hedge funds we track.
10. Baidu (BIDU): Twenty-one hedge funds had BIDU among their top 10 holdings at the end of September. John Thaler had the biggest hedge fund position in BIDU, with a $358 million position.