Hedge Funds Hate These 5 Stocks -- but Should You?
BALTIMORE ( Stockpickr) -- Even as there's a love-fest heating up between investors and stocks this Valentine's Day, hedge funds still have a hate list. And it's got some big names on it.
When it comes to investing, a rising tide tends to lift all ships. So it's telling when hedge fund managers opt to sink a few of their ships by taking the transaction fees and potential opportunity costs of selling. In short, when equities are broadly moving higher, portfolio managers have to really hate a stock to sell it.
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.
And luckily for us, we can get a glimpse at exactly which stocks are on top of hedge funds' hate lists by looking at 13F statements. 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, 239 funds filed the form for last quarter, 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 fund managers hate .
I guess it's not a huge surprise that Apple (AAPL) tops hedge funds' hate list -- everybody hates this stock right now . Shares of the $439 billion tech behemoth have fallen by around 25% in the last six months, dropping like a rock while the rest of the S&P 500 actually climbed 8%.
The selling was enough to scare hedge funds away from shares; funds unloaded 1.27 million shares of Apple last quarter, dropping their combined stake in the stock by $1.5 billion.
Apple has been getting a lot of attention -- and rightfully so. As the biggest publicly traded company in the world, Apple's fall is a big deal. But I've said before that this is a case of a stock price that's diverged considerably from this company's value. If Apple were a tenth of its size, it wouldn't be under the same pressures. Now, though, its $439 billion market cap and $467 per share price tag look scary for investors; the bigger they are, the harder they fall, right?