Hedge funds shook up many of their largest holdings in the fourth quarter.
Several stocks, such as Apple and Amazon.com, lost popularity, while a few others experienced a surge in interest, according to an analysis of fourth-quarter regulatory filings that disclosed U.S. long stock positions. Apple is no longer the most widely held stock, with the number of hedge funds holding a position in the company falling 21.5 percent to 124 at year-end, from 158 at the end of September, according to Goldman Sachs, which recently published a report highlighting this data.
Viking Global Investors, Point State Capital, Two Sigma Investments, Tourbillon Capital Partners, and Suvretta Capital Management were among the high-profile hedge fund firms to dump their Apple positions in the fourth quarter, leaving the iPhone maker as the seventh-most-popular hedge fund stock. Amazon.com also saw a sharp decline in hedge fund holders, falling to 131 at year-end from 151 at the end of September. Firms that dropped the company included Suvretta and Melvin Capital Management, two members of the SAC Pack — hedge funds with roots to Steven Cohen’s SAC Capital Advisors.
The sharp drop in hedge fund ownership of these two popular technology-internet stocks is especially significant given that Goldman tracked the stock holdings of 813 different hedge fund firms in the fourth quarter, 50 more than in the third quarter.
Interestingly, the funds that do own Apple and Amazon.com have much more conviction. For example, 65 hedge funds now count Apple among their top ten holdings, up from just 48 at the end of the third quarter. The number of hedge funds that included Amazon.com among their top ten holdings rose from 61 to 81.
Meanwhile, Abbott Laboratories and Time Warner, which ranked among the 14 most popular stocks at year-end, did not even crack the top 50 list at the end of the third quarter.
At year-end, 109 funds held shares of drug giant Abbott Laboratories, making it the 11th-most-popular hedge fund stock. Part of the surge in interest was probably due to merger arbitrage players, as Abbott finally completed its planned acquisition of device maker St. Jude Medical on January 4. Interestingly, just 16 hedge funds include the stock among their top ten holdings. And one is hard-pressed to find a recognizable hedge fund name among those with significant stakes.
Time Warner, the media giant currently trying to merge with AT&T, had 102 hedge fund investors at year-end, ranking No. 14. It did not rank among the top 50 the previous quarter. Thirty-six of the funds include the stock among their top ten holdings. It is the second-largest long of Jericho Capital Asset Management and the third largest of Carlson Capital and Ivory Investment Management.
Several other stocks that were on the top 50 list in September also saw a surge in hedge fund interest. Bank of America saw the number of hedge funds holding its shares jump by 47 to 157, making it the second-most-popular stock. Citigroup’s hedge fund ownership rose from 88 to 121, making it the eighth-most-popular stock, tied with Visa, which had an increase of nine hedge funds.
Another stock that moved up sharply in the recent quarter was cable and broadcasting giant Comcast. It now has 109 hedge funds among its shareholders, ranking tenth overall, compared with 71 funds the prior quarter. The five most popular stocks among hedge funds at year-end were Facebook with 163 holders, Bank of America with 157, Alphabet (class A) at 155, Microsoft Corp. at 148, and Amazon.com with 131.
