5 Stocks Hedge Funds Love -- and So Should You
BALTIMORE ( Stockpickr) -- There's a love story taking shape on Wall Street right now -- it's a hedge-fund-manager-meets-stock story. And the stocks hedge funds love in 2013 are worth noting this month.
Hedge funds spent much of the end of last year playing catch-up from a performance standpoint, trying to squeeze extra performance out of the market following what was a very strong year for stocks. To do that, they've been grabbing at more momentum names for the last quarter. But with a new calendar year a month in, hedge fund managers have been able to reset their performance clocks again and position themselves with names that still have some time to develop. Those are the ones that investors should be paying attention to.
Hedge funds' favorite stocks are telling right now, especially because they're subject to less lag.
And since we're looking at fund holdings in the aggregate, they're less impacted by the fact that some funds haven't filed yet. Consider it a sampling of the $133 billion managed by hedge funds -- a sneak peak.
Institutional investors with more than $100 million in assets are required to file a 13F, a form that breaks down their stock positions for public consumption. From hedge funds to mutual funds to insurance companies, any professional investors who manage more than that $100 million watermark are required to file a 13F. And by comparing one quarter's filing to another, we can see how any single fund manager is moving their portfolio around.
Without further ado, here's a look at five stocks hedge funds love .
>>5 Dividends That Are About to Get Bigger General Motors
Detroit auto giant General Motors (GM) has been enjoying some stellar performance in the last six months, rallying more than 42% since the end of the summer alone. That performance caught hedge funds' attention in the fourth quarter of 2012, with funds doubling their total holdings by picking up an extra 4.42 million shares. Ironically, hedge funds were big net sellers of GM in the prior quarter -- but they've since changed their tune on the carmaker.
GM is a dramatically different company than it was just a few years ago. Following its tumultuous bankruptcy, the firm emerged cutting a new, more svelte corporate profile. A much lower breakeven point for the firm is a very big deal for investors, particularly after the auto industry built up a reputation for carrying insurmountable costs on their income statement. A government exit from the stock should ease some shareholder concerns over Uncle Sam's stake in the firm -- and help the firm lose its "Government Motors" moniker.