5 Stocks Hated by Hedge Funds
Hedgies posted their second-worst year in history last year, with most ending 2011 dramatically underperforming the S&P 500 -- and this year, scores of funds were out of stocks when the market rallied, leaving many managers in catch-up mode. What does it all mean? For starters, it means that too many managers are becoming reactionary in their portfolio picks -- and investors have something to learn from what they're not doing.
Too often, investors only focus on what institutional investors like hedge funds are buying; but there's something to be gleaned from both sides of the trade. So instead, we'll focus on five stocks that hedge funds hate today.
To do that, we're focusing on 13F filings. 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. So far, 762 firms filed the form for the first quarter of 2012, and by comparing one quarter's filing with another, we can see how any single fund manager is moving their portfolio around.