Buying Stocks Based on 13F Fillings & Fund Manager Trends

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On today's episode of the Zacks Friday Finish Line, Associate Stock Strategist Ryan McQueeney and Editor Maddy Johnson chat with Maz Jadallah, CEO of AlphaClone, about investing strategies based on the trends of hedge fund managers.

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AlphaClone is a registered investment advisor and equity research firm that is a leader in active indexing. The firm is focused on finding greater returns through harnessing the power of hedge fund investments.

Funds are interesting indicators because they have to publish quarterly 13F reports detailing their equity holdings. AlphaClone digs into these filings and assigns specific funs "batting averages" based on the success of their moves.

The idea here is that investors looking to benefit from 13F would be best served by following the hedge funds with the best batting averages. This strategy is especially important in this volatile market, as investors can gauge where the strongest buying opportunities are popping up.

Maddy and Ryan were able to talk to Maz about AlphaClone's strategy and how investors can benefit from the 13F right now. Moreover, the group discussed the recent moves of infamous mega-investors such as Warren Buffett and Carl Icahn.

Maz explained that, for the most part, managers viewed last quarter's volatility has an opportunity to load up on a discount. For example, Buffett added to his positions in large banks and doubled down on his Apple AAPL holding. Icahn, a popular activist investor, upped his stake in Newell Brands NWL .

Another important thing to consider when following top managers is that fund typically hold positions longer than individual investors might expect. In fact, as Maz explained to Maddy and Ryan, the average holding positions for these funds is around 43 months.

Want to learn more about the alpha potential hidden in 13F filings? Wondering what top managers like Buffett and Icahn are thinking about the market's recent volatility? Make sure to check out today's episode of Friday Finish Line!

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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