Amazon.com was the most widely held stock among hedge funds heading into 2022.
At the end of the fourth quarter, at least 382 hedge fund firms held a position in the company, according to SEI Novus, which analyzes quarterly 13F filings to create what is perhaps the most comprehensive and detailed database of hedge fund holdings. Fifty-six hedge funds indicated that they had initiated new positions in Amazon, while 22 had fully liquidated their positions.
Amazon leaped over cloud computing giant Microsoft, which slipped from first to second in the fourth quarter with 376 hedge fund investors.
At year-end, a number of prominent hedge funds counted Amazon as their largest U.S. long position. These included Lone Pine Capital, which boosted its stake in the company by 70 percent during the period, Suvretta Capital Management, and Skye Global Management.
The stock was the third-largest long of Steven Cohen’s Point72 Asset Management, which established almost its entire stake in the fourth quarter, according to its filings.
Institutional Investor recently reported that Dan Loeb’s Third Point told clients in its fourth-quarter letter that it had acquired a sizable position in Amazon, and that the firm had steadily increased its stake over the past three quarters.
“Amazon is at an important crossroads as new management considers its long-term strategic plan to move the company forward, which may include several bold initiatives that are the subject of wide market speculation at the proverbial investor water cooler,” Loeb stressed in the letter.
“It’s not often that you get to buy shares in a high-quality company at the low end of its valuation range ahead of a meaningful reacceleration in growth, [and] at a 30% to 40% discount to its present intrinsic value with an almost unlimited runway of potential to compound in value,” Loeb added.
According to SEI Novus, Microsoft fell to second place after suffering a net decline of four hedge fund investors in the fourth quarter, while Facebook parent Meta Platforms experienced a net decline of nine hedge fund investors in the fourth quarter. Even so, Meta remained the third most popular hedge fund stock, with 325 investors.
Altogether, the eight most popular hedge fund stocks at year-end were the same as in the previous quarter, just in a slightly different order. In addition, 13 of the 15 most popular hedge fund stocks at year-end were also in the top 15 at the end of the third quarter.
The two new stocks to crack the list were high-flying chip maker Nvidia and drug maker Pfizer, which replaced Salesforce.com and United Health in the rankings. Nvidia is now tied with PayPal Holdings as the eleventh most widely held hedge fund stock, after it gained a net 26 new investors in the fourth quarter, according to Novus. During the December period, 37 hedge funds initiated positions, while 11 fully liquidated.
In the fourth quarter, Millennium Management nearly quadrupled its stake in Nvidia to nearly 3.9 million shares, while Coatue Management tripled its stake. Nvidia’s stock has quadrupled over the past 24 months, but through year-end, the company’s shares had fallen 30 percent from their November 2021 high.
Pfizer moved up to the fifteenth spot with 173 hedge fund investors, a net increase of 15. Thirty-one hedge funds initiated positions and 16 fully liquidated in the fourth quarter.
Interestingly, the drug giant attracted a lot of major interest from macro funds. The stock became the largest U.S. long of both Element Capital Management, which established a new stake of more than 2.5 million shares, and Caxton Associates, which boosted its stake by roughly 60 percent.
On the other hand, cloud software giant Salesforce saw a net 18 hedge funds fully exit its stock in the fourth quarter. Senator Investment Group unloaded all of its shares, while Maplelane Capital cut its stake by nearly half, although that move merely knocked the stock down from Maplelane’s largest to its second-largest U.S. common stock long.
Here are the 15 stocks most widely held by hedge funds as of the end of the fourth quarter, according to SEI Novus:
1. Amazon.com (held by 382 hedge funds)
2. Microsoft (held by 376)
3. Meta Platforms (held by 325)
4. Alphabet “A” (held by 296)
5. Apple (held by 245)
6. Alphabet “C” (held by 241)
7. Visa (held by 218)
8. Mastercard (held by 208)
9. JPMorgan Chase (held by 200)
10. Walt Disney (held by 196)
11. PayPal Holdings (held by 193)
12. Nvidia (held by 193)
13. Berkshire Hathaway (held by 190)
14. Johnson & Johnson (held by 187)
15. Pfizer (held by 173)
