Hedge fund managers barely old enough to buy their first Ferrari
keep showing up on the Forbes 400 list of richest Americans, so,
one surmises, these guys must really be smart. And names like David
Einhorn, Bill Ackman, Stephan Mandel, David Tepper and John Paulson
fill the financial pages, as they badmouth stocks they've shorted,
tell corporate CEOs how to run their companies, and make mega-bets
on commodities and industries. The geniuses must file a 13F filing
at the end of each quarter, disclosing their positions, and here we
look at the top ten stocks they were holding at March 31.
Before we launch in: do you think your S&P 500 fund in that
under-contributed 401K of yours got trounced by the Einstein's, or
held its own?
) was the most owned stock within the group, which has helped drive
Apple to the top of our
market cap rankings
. Even after the run up over the last several years,
Apple's EV to EBITDA
multiple looks reasonable -- assuming it can keep people wanting
the latest iPhone, iPad and Macbooks.
Next is Google (
). The stock is flat going back to the beginning of 2008 but up
significantly since the 2009 lows. Google's market cap is
approaching $200 billion with
$50 billion in cash
EV to EBITDA
multiple around 12. The search giant is still trying to expand
beyond search. Google Chrome recently passed Internet Explorer as
the most used internet browser, according to StatCounter. Google
entered the hardware market for mobile phones with the acquisition
of Motorola Mobility. And a lot of effort is being put behind
Google+ to compete in social networks where Facebook (
) and Twitter dominate.
) is also a hedge fund favorite, its market cap near $250 billion.
It trades near 8 on an
EV to EBITDA
basis. The dividend yield is approaching 3%.
Apple, Google, Microsoft - it takes a Ph.D. in applied mathematics
to come up with those choices? Half the day traders who didn't
shower this morning own those stocks, or are making options bets on
Between the hedge fund pros and the at-home Joe's, the three big
stocks are doing well. Only Google underperformed the broader
market on a total return basis.
AAPL Total Return Price
The remainder of the hedge fund favorites include Express Scripts (
), Citigroup (
), Pfizer (
), Qualcomm (
), JPMorgan (
) Cisco (
) and Oracle (
All well-known names. Citigroup one could call a surprise, given
its basket case condition until recently, but the pros know the
awesome spring-back power of large banks. Pfizer, too, a curious
choice given loss of its Lipitor patent, but the stock has been so
beaten down that to many it looks cheap.
Among the bottom seven hedge fund favorites, only Express Scripts
and Qualcomm outperformed the
S&P 500 on a total return basis
. So, if you're 100% invested in Apple, you smoked the M.I.T. grads
but might be losing some sleep at night over being too concentrated
in one stock.
ESRX Total Return Price
JPM Total Return Price
So, 4 of 10 hedge fund favorites outperformed the S&P 500 on
a total return basis. You can easily follow the large hedge funds
by tracking their 13F filings. But don't count on catching any hot
From the editors of YCharts.
YCharts Pro Investor Service