10 Stocks Most Popular Among Hedge Funds

by: Insider Monkey

Hedge fund managers may not be the final word on investment decisions, and investors should always do their own research, but hedge funds’ top stock picks are still a good source for investment ideas. And, when you see several hedge fund managers all buying the same things at the same time, it is generally a good investment. Insider Monkey tracks around 350 hedge funds and prominent investors. The table below shows the 10 most popular stocks among these 350 fund managers.


No. of hedge fund





















Apple Inc. (NASDAQ:AAPL): Apple provides personal computers, mobile communication and media devices. The stock returned 18% so far in 2011. People mainly bet on AAPL’s growth potential. AAPL is loved by Goldman Sachs, UBS and Merrill Lynch. Cramer is also bullish about AAPL. The stock was in 125 hedge funds’ portfolios in the third quarter. The largest hedge fund position belongs to Ken Griffin, whose Citadel Investment Group boosted its position by 204% and had 2.43 million shares in AAPL. AAPL also accounted for the largest position in Jim Simons’ portfolio. Jim Simons’ Renaissance Technologies invested about $400 million in the stock.

Google Inc. (NASDAQ:GOOG): The online mass information technology company has returned 4% so far in 2011. Hedge fund managers love Google because it’s less risky and is undervalued. Ninety six hedge funds were bullish about GOOG at the end of the third quarter. Julian Robertson, John Griffin and Jean-Marie Eveillard each increased their holdings in GOOG in the third quarter.

Microsoft Corp (NASDAQ:MSFT) is also a mega-cap technology stock loved by hedge funds. Its forward PE of 9.3 is comparatively lower than its peers’. The stock has lost 6% year to date, while gained 4.05% so far in the fourth quarter, underperforming the market by 7.35%. Ninety four hedge funds invested in MSFT in the third quarter. Stephen Mandel, Ken Fisher, John Griffin, and Robert Pitts were bullish about MSFT and significantly increased their positions during the third quarter.

Citigroup Inc. (NYSE:C) is a global financial services holding company. The stock was hammered by the European debt crisis, and has lost 48% so far this year. Among eighty seven hedge funds that had positions in Citigroup at the end of the third quarter, Bill Ackman, Ken Heebner, Charles Clough, and Whitney Tilson had relatively large Citigroup stakes.

JPMorgan Chase & Co (NYSE:JPM) is a financial holding company which operates a series of bank subsidiaries. JPM has lost 22% year to date. Seventy eight hedge funds had JPM in their portfolios. Paul Ruddock and Steve Heinz’s Lansdowne Partners boosted its position by 219% and had 22.75 million shares. John Paulson, Jim Simons, D. E. Shaw also had large positions in the stock.

Bank of America Corp (NYSE:BAC) is the third financial company in our list so far. The stock is in a downturn throughout 2011, and has lost 61% year to date. Seventy five hedge funds had positions in BAC at the end of September. Bruce Berkowitz, John Paulson, and D. E. Shaw had the largest stakes in the banking giant.

Pfizer Inc. (NYSE:PFE) is a biopharmaceutical company. The stock has returned 28% so far in 2011. Investors pick PFE because of its inexpensive valuation, limited earnings risk, and the start of a new product cycle. Ken Fisher’s Fisher Asset Management has nearly 22 million shares in the stock. Jeffrey Tannenbaum, D. E. Shaw, Cliff Asness, and Eric Mindich were also bullish about PFE in the end of the third quarter.

Other stocks hedge funds are crazy about include General Motors Company (NYSE:GM), Wells Fargo & Co. (NYSE:WFC), and Qualcomm Inc. (NASDAQ:QCOM). Our research has shown that by focusing on the investments of the best hedge funds, investors are more likely to outperform the market in the long term.

Disclosure: I am long MSFT, C.