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Here Are The Most Popular "Hedge Fund" Stocks

Tyler Durden's picture




 

The last time we looked at which stock is at the penthouse floor of the hedge fund hotel (as of December 31), we learned that virtually everyone had heard the "long GM" idea dinner pitch. That was when GM stock was about 20% higher, wasn't splayed out in front of Congress in a humiliating scandal exposing management for a bunch of bottom-line hungry pseudo-criminals, and had announced about 15 million less recalls, which probably explains why hedge funds are not only underperforming the S&P500 for the 6th year in a row, but are down YTD as a group.

And while on Friday we showed what the most hated (by everyone) Russell 2000 stocks are as of the most recent period (and hence most susceptible to epic short squeezes), here is a listing of what the most beloved stocks, by hedge funds, are as of March 31 courtesy of Goldman Sachs.

One thing to note: just like in the case of first Apple, then GM, any time virtually everyone piles into the most held stock, it means just one thing - there are no marginal buyers left.

Another thing to note: while Google is now the most popular hedge fund hotel stock, above both Apple and GM, as a result of recent gross deleveraging across the hedge fund community the 158 holders of GOOG are still less than the 167 hedge funds who were long the stock as of December 31.

 

Here is how the popularity of various stocks changed during 2014: below is a list of the largest positive and negative popularity changes. With GM rapidly becoming the most loathed by the HF community stock, one wonders: does anyone do any due diligence anymore?

 

Which is why if anyone wants to put on the most contrarian trade possible, it would be going long the most shorted stock in the Russell 2000, Blyth, and pairing that with a short in Google.

 

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Sun, 05/25/2014 - 16:40 | 4793853 valley chick
valley chick's picture

Can't make this shit up...faceplant?

Sun, 05/25/2014 - 17:01 | 4793892 Buckaroo Banzai
Buckaroo Banzai's picture

LOL, faceplant... or facepalm??

Sun, 05/25/2014 - 17:40 | 4793963 Newsboy
Newsboy's picture

I think TWA is gonna make a comeback.

Sun, 05/25/2014 - 18:01 | 4794010 sidiji
sidiji's picture

err...what if  Blyth declared bk the next day?

Sun, 05/25/2014 - 17:00 | 4793888 Buckaroo Banzai
Buckaroo Banzai's picture

Anybody else craving some strawberry soft-serve ice cream? I can't figure out why.

Sun, 05/25/2014 - 18:51 | 4794105 knukles
knukles's picture

Strawberry with a choco-raw meat dip on a particulate matter high fructose corn suyrp cone with MSG sprinkles!

Sun, 05/25/2014 - 17:03 | 4793889 rycK
rycK's picture

The only ringer in the 20 negative bunch is Ford. I can see GM going down at least in the US but Ford? I have no use for the momentum stocks Apple, Facebook and such. 

Sun, 05/25/2014 - 17:15 | 4793913 Muppet
Muppet's picture

Tiny Hertz near the top is a puzzle

Sun, 05/25/2014 - 17:56 | 4793994 aVileRat
aVileRat's picture

Few points:

- Event driven funds got really lucky due to sell side finally being spooked by the bear route, and pulling down the 1Q14's and 2013FY's. 2H14 is heavily backloaded as is corp guidance in the consumer retai

- most of the trades are about 130 days old. Also there is no variance between holdings for event driven or index/program styles.

- Some of those stocks are good but not for the reason you may think they are. (P/Ebitda, last 12 month RSI, yadda yadda).

Few things to consider:

-If US offshore M&A can not be done, how will corporates gear up their operating leverage or improve their production per unit growth / top line growth ?

- If we are looking at a East vs. West world, what is going to be the best leverage going forward

- What will the EU do should the world suddenly be driven into a West vs. East world, who benifits most from logistics or wealth transfer.

- Yes, Ford and VW (and maybe Toyoda if he can get his shit in gear) have a different set of problems but are much better off than GM which is 1 whistleblower away from another trip to Ch11 (or 13, I hope).

- Aerospace has a high ROA, and low leverage compared to the 1995 rally run (trade is over). Refiners? Think about operating leverage and where the bulk of US Exports are going to flow in 10 years.

 

Funny because this article dovetails with Bloomberg's spotlight this weekend and comments earlier this month about how behind the retail screens it is a very much bear (sic) fisted brawl right now. Some funds are down and have lost over 80% of their assets since 2010. I can honestly see the 2-class economy flowing up into politics and finance at this stage. Expect to see more guys like Woodbine Capital start to make the news as leading indicators start to stall out, or disconnect further.

 

 

Few points to note:

- Event's or old school pickers are crushing it because the index calls & beta trades that relied on asset inflation are collapsing.

- Nobody can still figure out what is driving 30 years up to 200, when everything indicates this bull rally in bonds is not supported by anything and reckless given the full knowledge the QE (which Tyler has documented rather well) was the only solid backstop keeping the rate abnormally low.

- Algo trading is starting to be decoded. This week alone my guys figured out how to bust a "new" program which was in use during the tech route  a month ago that was trying to flash crash a local sector. In 2 days we caused that algo to record a 86% loss on 7 names alone, who knows how much that guy lost on the other side of the trade. Whoever wrote that program through a dealer Tyler1 tracks, I hope is looking for a job outside the industry this weekend. ECCW's for algo hunters are very good now, and I suspect this "liquidty" function will lose the edge, unless there is a sudden innovation in AI or 128 bit multi-thread.

- If anyone is bored, it is worth your time to look up the number of funds who are investing in new corporates or industries vs. playing themes.

- Are fund managers (and pensions) really chasing the "most dirty trash?" It's important to note what under SEC we are required to disclose and when. Nobody shows their new ideas. 

- Are names held for ROEC or liquidty ?

- At what point will the fun and games in technology ratios & metrics require a Wells notice ? Will we ever see regulation of the "clicks" or other metrics that underly how non-GAPP revenue is reported for software ? 

- Is the FDIC or anyone currently prepared for a restructuring of  the "Mae's" ?

- At what point is consumer driven growth going to become asset investment or productivity led growth ? Which industries are growing productivty:

http://www.upstreamonline.com/live/article1363241.ece

- Gold and gold names (and silver): If the Fixes (end of day or mid-day posts) are shut down, what will happen to the market transparency and how will large volumes be managed. Note: VIX and DOW have no "Fix", yet are things really much better with a "float" vs a "peg" ?

- If someone is thinking of making a liquidity event on their gold stache (sic), what is the reasonable rate of exchange vs. the cost of carry and transport ? As risk premiums increase, what will increase faster, the price of Troy or the price of storage ?

 

 

Sun, 05/25/2014 - 21:18 | 4794072 Frilton Miedman
Frilton Miedman's picture

Outstanding!

That was an awsome breakdown of sector fundies, political potentials & pending market pitfalls

Hats off for scalping the scalper & beating an alg at his own game.....that was beautiful!

I felt guilty reading it, as if a complete stranger just handed me cash.

Thank you.

Mon, 05/26/2014 - 00:10 | 4794659 chirobliss
chirobliss's picture

Excellent commentary, Thanks.

Mon, 05/26/2014 - 17:49 | 4796489 Freddie
Freddie's picture

Great stuff Vile Rat.  I wonder if some of these chosen companies by the elites have to be bought by these funds.  Things like FacePlant total surveil or some of the elites darlings like L. Ron Musk and his cult.

Sun, 05/25/2014 - 17:02 | 4793895 I Write Code
I Write Code's picture

So what, they're almost all household names.

Sun, 05/25/2014 - 17:53 | 4793992 Bay of Pigs
Bay of Pigs's picture

BTFD then?

Sun, 05/25/2014 - 17:40 | 4793960 Silverballs
Silverballs's picture

I'm very skeptical of the stock market as a whole but I'm glad to see the few companies I do buy which are the big railroads not on this list

Sun, 05/25/2014 - 18:13 | 4794033 Frilton Miedman
Frilton Miedman's picture

Silver,

Be careful, transports are the frothiest sector right now, just a suggestion from a non-professional who trades on the side, keep an eye on the relative strength of small caps and the Q's....they might be sending warning signs of a market topping.

If, and I stress "if" this is a market top, transports could fall hard.

Otherwise, other sectors have some catching up to do with tranny's.

 

 

Sun, 05/25/2014 - 19:24 | 4794160 Silverballs
Silverballs's picture

Thank you for your insight but I'm a long term investor in that sector I know there'll be ups and downs but I'm convinced that trains will play major role in future of transportation.. Whether it'd be a low growth high energy cost future or a high growth low energy cost future trains in my opinion should thrive..but I believe a low growth high energy cost future is coming and trains are some of most efficient means of transportation.. Here's just one site you can check out it doesn't matter if you agree or not with the site it's a glimpse of the people running this country and most the world want America2050.org

Sun, 05/25/2014 - 19:35 | 4794193 Frilton Miedman
Frilton Miedman's picture

 

 

 

Silver, you're a better man than I.

I'm too worried about consumption, with stagnant wages v household debt & a possibility for rates to increase as QE is backed off and the weird lack of inflation (accept grains, meats) thus far, relative to levels of QE.

While I don't daytrade or buy garbage, I don't have your patience or diligence.

 

 

Sun, 05/25/2014 - 20:40 | 4794303 Silverballs
Silverballs's picture

Interest rates can't rise bc of the gov debt problem and TBTF derivatives balance sheets.. If they do LOOK OUT!!

Sun, 05/25/2014 - 23:19 | 4794608 Frilton Miedman
Frilton Miedman's picture

Agree, and to add to your point, household debt is still far too high relative to wages to even consider a rate hike.

But there lies the problem, no wage growth since the '08 nightmare started, regardless how insanely far Fed policy has gone.

To me, this means if we were to start a recession now, we'd be screwed without fiscal (not Fed cheap money) intervention, too much net worth was removed from the middle in 2008, too much lingering debt.

A telltale sign of a market reversal is when small caps or the Q's start dropping without the SPX, they have been for a few months.

That hasn't happened since 2008, maybe it's just sector rotation, I can't say, but best err on the side of caution IMO.

 

 

 

Sun, 05/25/2014 - 18:33 | 4794019 Frilton Miedman
Frilton Miedman's picture

 

 

"Dear Mr Hedge fund manager,

Please note that at the late stages of a cyclical bull, usually lasting 3 to 5 years and this being a sixth year - froth begins to fade, value replaces growth, small caps start to fade as other high beta sectors that have lagged start to pick up.

Sincerely,

 - Some guy who doesn't know as much as you about investing/trading"

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