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WHAT HEDGE FUND MANAGERS SAY YOU SHOULD INVEST IN

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WHAT HEDGE FUND MANAGERS SAY YOU SHOULD INVEST IN

May 19 2015, 08.40am GMT

STOCK.com

Alibaba Group Holding Ltd. (NYSE: BABA) is no longer one of the favorites amongst investors and prominent hedge fund managers are turning to Citizens Financial community bank which seems to have found favor in Q1.

Friday was the cutoff for big investors to showcase their long stock positions to the SEC (Securities and Exchange Commission).

This ritual, that is held quarterly, offers investors a glimpse into the so-called smart money portfolios. Investors that manage more than $100 million, have to reveal their stock holdings at the end of every quarter in something known as the “13-F” filing. All the fillings are to be completed 45 days after the quarter has ended.

These filings have given rise to a cottage industry. A horde of mutual funds & exchange traded funds commit to tracking the top holdings of bigger hedge funds. This approach has managed to attract some interest. Experts, however, also offer a host of caveats.

Whalewisdom.com is a website that’s designed to track regulatory filings. This website managed to crunch the numbers for the 1st quarter and focused on 197 of the most popular investors that its users track. This group unsurprisingly includes Carl Icahn, Warren Buffett’s Berkshire Hathaway and hedge funds that are run by high-profile type investors like Daniel Loeb, George Soros, David Tepper, Bill Ackman and David Einhorn.

Citizens Financial Group (NYSE: CFG) topped the list for taking brand-new positions, with a recorded 7.1% of the filers adding shares of the bank, which debuted in September with an initial public offering (IPO) price of $21.50 per share. The shares traded at about $26.19 on Monday and increased 8.5% since the first quarter ended and year-to-date are up 5.4%.

One of the most liquidated and accumulated stocks was Google Inc. (NASDAQ: GOOG), and interestingly both Apple Inc. (NASDAQ: AAPL) and Microsoft Corp. (NASDAQ: MSFT) were amongst those who showed as most reduced.

Ranking higher on all two of the measures was pharmaceutical company Actavis (NYSE: ACT). Since the end of the 1st quarter, the company’s shares dropped 0.4%, but year-to-date it still remains up more than 15% in addition to the 4.8% gain in May.

That said, on the downside, Alibaba, who is the Chinese e-commerce giant, had previously been a hot pick for investors when it made its IPO last year, recorded about 6% of big filers actually liquidating the stock totally in Q1, according to Whalewisdom.

The company’s shares, since the end of Q1, increased about 4.5%, but year-to-date are off more than 16%. Filings have shown that not everyone has decided to ditch the stock as several big hedge funds including Soros have added stakes in Alibaba. The company saw a tough first quarter, dropping about 20%, however, regained around 4.5% in April. Alibaba, earlier this month, also appointed a new CEO.

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