Hedge funds are making big profits with these names.
Once every quarter, investors get a glimpse inside the minds of some of the wealthiest and most successful investors in the U.S. The U.S. Securities and Exchange Commission requires any funds with more than $100 million in assets under management to file public quarterly updates on their stock holdings on form 13F. Hedge funds made some big profits in ared-hot U.S. stock marketin the first quarter of 2019. Novus recently compiled the following list of the top seven largest stock investments among fundamental equity managers that filed 13F forms.
Apple is the top overall pick among hedge fund managers. After a hot start to the year, Apple shares dipped in May due to the companys exposure to the U.S. trade war with China. However, the stock still shows 22% gains for the year, outpacing the 15.4% rise of the S&P 500 index. D.E. Shaw & Co. and Adage Capital Management are top investors, each owning more than $1 billion in AAPL stock. Hedge funds reported owning a total of $57.9 billion inAAPL stockat the end of the first quarter.
The company that overtook Apple as the most valuable public company is also the second top pick among hedge funds.Microsofthas been a market leader in 2019, gaining more than 32% year-to-date and pushing its market cap to more than $1 trillion. In April, Microsoft reported fiscal third-quarter revenue growth of 14%, including 41% growth in commercial cloud sales and 71% Azure revenue growth. Top Microsoft investors include TCI Fund Management ($2 billion) and Tiger Global Management ($1.5 billion). Hedge funds reported $31.6 billion in total MSFT stock holdings.
Bank of Americahas the 13th heaviest weighting in the S&P 500, but it is the third most-owned stock among hedge fund managers. Bank of America shares are down 5.6% in the last 12 months after expectations for rising interest rates didnt play out the way many investors anticipated. Top Bank of America investors include Theleme Partners ($499.7 million) and Darsana Capital Partners ($331 million). Hedge funds decreased their exposure to BAC stock in the first quarter by $4.1 billion but still reported a total of $30.5 billion in BAC stock holdings.
While hedge funds are overweight Bank of America in 2019, they are even more overweight Wells Fargo stock. Wells Fargo barely cracks the top 25 in S&P 500 weighting, but it is the fourth most popular investment among hedge funds. Wells Fargo shares are down 16% in the past year after the Federal Reserve restricted the banks asset expansion in February 2018. Theleme Partners and D.E. Shaw & Co. are top Wells Fargo investors, with holdings of $498.9 million and $334.7 million, respectively. Hedge funds reported $26.3 billion in total WFC stock holdings.
Despite ongoing concerns about regulation, platform abuse and potential antitrust action, Facebook has been the best-performing stock of 2019 among hedge funds top seven holdings. Shares are up 34% year-to-date, and Facebook reported a 16% rise in average revenue per user in the first quarter. Tiger Global is by far the largest Facebook investor among hedge funds with a $1.4 billion position, followed by Citadel with an $883.6 million stake. Hedge funds reported owning a total of $22.6 billion inFB stockat the end of the first quarter.
Coca-Cola may be the most defensive play among the top hedge fund holdings. KO stock pays a 3.1% dividend, and shares are up just 8% year to date. The company reported solid 5% sales growth in the first quarter and reiterated its full-year guidance for flat earnings growth. Overall, hedge funds reduced their net KO stock holdings by $140 million in the first quarter. Top Coca-Cola investors include Adage Capital Management ($217 million) and Renaissance Capital Management ($168 million). Hedge funds reported $20.9 billion in total KO stock holdings.
Hedge funds are actually underweight Amazon stock relative to the other six stocks on this list given Amazon has the second-largest market cap in the S&P 500. Amazon is off to a hot start to 2019, up 24% on the strength of 16.9% revenue growth in the first quarter. Top Amazon investors include Tiger Global Management ($1.2 billion) and Lone Pine Capital ($1.1 billion). Hedge funds decreased their exposure to AMZN stock in the first quarter by $3.7 billion but still reported $20.9 billion in totalAMZN stockholdings.