Technology Still Dominates the Current Top 10 Holdings in Hedge Funds
We have always maintained here at 24/7 Wall St. that keeping portfolio holdings a secret among managers at hedge fund and mutual funds is probably not their best quality, as they tend to talk among themselves and share ideas, but one thing is for sure: They find big winners, and they ride them until there is nothing left. That is one of the big reasons that mega cap technology dominates the top 10 hedge fund holdings again this year.
A new research report from RBC once again does a deep dive into the holdings of the top hedge funds. Here’s what RBC said in discussing its methodology.
We’ve been tracking two screens of S&P 500 stocks with the heaviest ownership by 340 major hedge funds with significant investments in US equities. The first, our Hedge Fund Hot Dogs screen, captures those with the most hedge fund dollars invested in them. These are the names most commonly associated with hedge fund crowding. The Hedge Fund Hotels is the second screen of S&P 500 names with heavy hedge fund ownership that we track. These are the S&P 500 companies with the highest percent of their market cap owned by hedge funds. This screen does a good job of identifying stocks that investors may not realize have high hedge fund ownership.
We pulled the top 10 stocks from RBC’s Hedge Fund Hot Dogs screen.
The huge social media leader has been volatile recently after the disclosure of user data being compromised, but absolutely blew out earnings last week. Facebook Inc. (NASDAQ: FB) is the largest social network with over 2 billion monthly active users and over 1.4 billion daily active users. The company generates revenue from advertising and payments, with over 95% of its revenue coming from advertising. The company generates close to 50% of its revenue in the US and Canada and is expanding rapidly in International markets.
The company’s offerings also include Instagram, a mobile application that enables people to take photos or videos, customize them with filter effects, and share them with friends and followers in a photo feed or send them directly to friends; Messenger, a messaging application for mobile devices and the web that enables people to reach others instantly, as well as businesses to engage with customers; and WhatsApp Messenger, a mobile messaging application.
The Wall Street consensus price target for the company is $219.72. The shares closed trading on Monday at $191.54.
The search giant continues to expand and is even working on a driverless car now. Alphabet Inc. (NASDAQ: GOOGL) is a global technology company focused on key areas, such as search, advertising, operating systems and platforms, enterprise and hardware products. The company generates revenue primarily by delivering online advertising and from selling apps and contents on Google Play as well as hardware products. The company provides its products and services in more than 100 languages and in 190 countries, regions and territories.
Google offers performance and brand advertising services. Its Google segment includes internet products, such as search, ads, commerce, maps, YouTube, apps, cloud, Android, Chrome and Google Play, as well as technical infrastructure and newer efforts, such as virtual reality.
The Wall Street consensus price target estimate is $1,264.51. The shares closed Monday at $1,140.90.
This is a top old-school technology stock that posted all-time highs this year and has a massive $138.6 billion sitting on its balance sheets. Microsoft Inc. (NASDAQ: MSFT) continues to find an increasing amount of support from portfolio managers who have been adding the software giant to their holdings at an increasingly faster pace all this year and last.
Many Wall Street analysts feel that Microsoft has become a clear No. 2 in the public or hyper-scale cloud infrastructure market with Azure, which is the company’s cloud computing platform offering. Some have flagged Azure as a solid rival to Amazon Web Services. Several analysts maintain that Microsoft is discounting Azure for large enterprises, so that Azure may be cheaper than AWS for larger users. The cloud was big in the recent earnings report, which was outstanding.
Microsoft shareholders currently receive a 1.83% dividend. The consensus price objective for the company is $111.06. The shares closed Monday at $101.05.
This company is the absolute leader in online retail and a dominant player in the cloud storage business and it remains a top pick on Wall Street. Amazon.com Inc (NASDAQ: AMZN) serves consumers through retail websites, such as Amazon.com and Amazon.ca, which primarily include merchandise and content purchased for resale from vendors and offerings fromthird-party sellers.
Amazon Web Services is also the undisputed leader in the cloud realm now, and many top analysts see the company expanding and moving up the enterprise information value chain and targeting a larger total addressable market. The company serves developers and enterprises through Amazon Web Services (AWS) that provides compute, storage, database, analytics, applications, and deployment services that enable virtually various businesses.
The Wall Street consensus target is $1,834.52. The shares closed Monday at $1,689.12.