Earlier today we observed [7]that in a world in which central banks have implicitly banned risk with their actions over the past 7 years, hedging long exposure is meaningless (and when central banks do lose control, a few shorts will have zero impact when the market is simply shut down and all trades or liquidations are promptly banned) and as a result hedge funds are set to underperform the S&P500 for the 7th year in a row.
Yet riding on the laurels of a business model that is no longer relevant, many still are fascinated to analyze and over-analyze the holdings of hedge funds at any given time: just observe the frenzy that surrounds 13-F release day 45 days after the end of any given quarter (especially when it comes to central bank 13-F filings, such as those by the Swiss National Bank).
So for all those who need validation that they are part of a big hedge fund hotel club, which implicitly means there are few if any incremental fast money buyers left, and wish to know the top hedge fund holdings, here is a list of the 50 stocks which according to Goldman "matter the most" to hedge funds, the stocks which appear among the largest 10 holdings of hedge funds.
There are few surprises in this list which traditionally sees very little changes among the top 20 holdings, but what is most notable is that as of June 30, AAPL (nor FB) is no longer the most beloved stock by the hedge fund community. These have both been replaced with the latest pharmaceutical serial acquirer of companies, and a stock which has seen the activist presence of both Carl Icahn (via Forest Labs) and Bill Ackman (via Valeant), Allergan which is now the stock that has the largest number of funds with AGN as a top 10 holding.
[8]
As noted above, this means that with virtually everyone in the Allergan pool, the stock will likely only go down from here, especially if hedge funds suddenly find themselves in liquidation mode and have to sell their biggest winners or most liquid holdings.
What about on the other end: the 50 stocks most shorted by hedge funds? The answer is shown below, and what we find surprising is that as of June 30, DIS was the stock which Goldman estimates had the largest value of hedge fund short interest. Which perhaps explains the recent media meltdown and why two weeks ago, Disney along with other content providers, suffered a historic - and long overdue according to many - plunge.
[9]
Source: Goldman
