While chasing what portfolio managers own isn’t always the best idea, many people have made a lot of money by simply mimicking what legendary investors like Warren Buffett hold. With the market starting to exhibit an increase in volatility, as February was the first down month in almost a year and a half, we thought we would take a look at where the so-called smart money is headed as we get ready to close out the first quarter of 2018.
In a new Jefferies research report, outstanding strategist Steven DeSanctis has started to look at the holdings of hedge funds, as opposed to just reviewing long-only mutual funds. One reason is simple: The holdings for hedge funds come out earlier than those for mutual funds and allow the analysts to get an earlier look at how they are positioned.
We were particularly interested in the larger cap stocks that had the biggest percentage increase in ownership, and the Jefferies research had the data. It’s an interesting collection of well-known companies, all of which appear to be well positioned for the future. They are listed by the highest to lowest percentage of increase in ownership.
- Brighthouse Financial Inc. (NYSE: BHF), 13.4% increase
- Aetna Inc. (NYSE: AET), 6.2% increase
- NXPI Semiconductors N.V. (NASDAQ: NXPI), 5.7% increase
- PG&E Corp. (NYSE: PCG), 5.2% increase
- Time Warner Inc. (NYSE: TWX), 5.1% increase
- Monsanto Co. (NYSE: MON), 4.9% increase
- Electronic Arts Inc. (NASDAQ: EA), 3.4% increase
- Regeneron Pharmaceuticals Inc. (NASDAQ: REGN), 3.3% increase
- Micron Technology Inc. (NASDAQ: MU), 3.3% increase
- Allergan PLC (NYSE: AGN), 3% increase
There you have it, the 10 large-cap stocks that the top hedge funds have added to their portfolios. Some are clearly value-rated purchases, while others have potential catalysts that could start driving the share price higher. All the companies look like good additions for investors that like large-cap growth and have a reasonable amount of risk tolerance.