Step Aside Amazon: There Is A New “Most Popular” Hedge Fund Darling Stock
Overnight, Goldman has published its closely-watched quarterly hedge fund tracker report which breaks down the trends and themes as revealed by the latest batch of hedge funds 13F filings. While we will have a detailed breakdown in a subsequent post, one notable development caught our eye: as Goldman strategist Ben Snider writes, after several years in which Amazon was the most popular and widely held stock atop the Goldman Hedge Fund VIP list, there is a new hedge fund darling in town: Facebook.
But before we focus on that, another notable feature of the Goldman hedge fund VIP basket, which has traditionally been dominated by tech stocks, is that it just matched its worst 3-month drop on record…
… which has forced hedge funds to rotate aggressively from growth (tech) to value (ironically just as the reflation theme appears to have peaked)…
… a development we discussed earlier this week when we summarized the latest 13F changes as well as Goldman Prime’s observation of the biggest shorting of tech stocks by hedge funds in the past five years, and when we correctly predicted the recent push higher in tech names on the back of yet another short squeeze.
And now, thanks to the GS hedge fund tracker, we have a detailed breakdown of how the 2 and 20 crew traded within the FAAMGs.
What we find is that while the same five stocks rank atop Goldman’s list of the most popular long positions, there is now a a new order:
Here is the full list of 50 stocks that make up the GS Hedge Fund VIP list as of March 31, 2021:
This basket matters because as Goldman notes, it has outperformed the S&P 500 in 61% of quarters since 2001 with an average quarterly excess return of 65 bp (if not Q1).
As Snider adds, of the hedge funds in Goldman’s analysis, 27% owned FB shares and 57% of those own it as a top 10 position. AMZN, the previous most popular position, dropped to third and ranked among the 20 stocks with the largest decline in hedge fund ownership in 1Q, along with a handful of high-multiple growth stocks and two SPACs.
Elsewhere, and in keeping with the growth to value rotation, most of the 15 new VIPs are cyclicals, including C, GM, and FCX. The full list is ADBE, AMAT, C, CCK, CZR, DVN, FCX, GM, HCA, INFO, IQV, MELI, SCHW, TLND, UNH. However, some growth companies ranked among the stocks with the largest increases in ownership last quarter, including ILMN, SNOW, and TWTR.
Fri, 05/21/2021 – 09:40