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10 Hedge Fund Stocks to Buy Now

These stocks are extremely popular with a variety of funds

By Jeff Reeves, Executive Editor of InvestorPlace.com

http://invstplc.com/1rk7bU4

We just passed the latest 13F reporting deadline last week, and that means hedge fund managers have disclosed their latest holdings.

fund185I’m sure you noticed the endless parade of stories about what Warren Buffett is buying and which stocks to buy now because Berkshire Hathaway (BRK.B) is buying them, too.

Anyhow, the important thing to remember is that hedge funds and iconic investment managers can always have a bad year — and that their recommended stocks to buy now aren’t guaranteed to deliver a profit or beat the S&P 500.

Besides, even if they are having a great year, the hedge fund information you get in 13F filings are inherently old news because they are coming from last quarter’s portfolio makeup.

If you really want to trade what the “smart money” is trading, the best way is to focus on the stocks that hedge funds writ large are buying and selling — and thus rely on the power of several well-heeled managers to backstop your investments instead of just following one particular fund’s strategy.

So what stocks do dozens of hedge funds all have in common right now? Well, the folks over at HedgeMind have compiled a great list based on the latest publicly available information.

Here’s a breakdown of the 10 stocks hedge funds love most right now:

#10 Hedge Fund Stock to Buy Now — Actavis (ACT)

  • actavis 185Sector: Pharmaceuticals
  • Market Cap: $57 billion
  • Hedge Funds Increasing Exposure: 18
  • Total Hedge Funds Owning Stock: 40
  • YTD Return: 29% vs. 7% for the S&P 500

Actavis (ACT) soared in February on news it was acquiring Forest Labs as a way to bolster its product pipeline and cut costs. It has been on everyone’s hot list ever since.

#9 Hedge Fund Stock to Buy Now — Mastercard (MA)

  • ma-stock-mastercardSector: Business services
  • Market Cap: $89 billion
  • Hedge Funds Increasing Exposure: 19
  • Total Hedge Funds Owning Stock: 34
  • YTD Return: -8% vs. 6% for the S&P 500

MasterCard (MA) has admittedly lagged the market a bit in 2014, however the payment processing giant is in the right space for the mobile and digital payments revolution as the world goes “cashless.”

#8 Hedge Fund Stock to Buy Now — Priceline (PCLN)

Priceline stock PCLN

  • Sector: Consumer discretionary
  • Market Cap: $67 billion
  • Hedge Funds Increasing Exposure: 19
  • Total Hedge Funds Owning Stock: 35
  • YTD Return: 10% vs. 6% for the S&P 500

Priceline (PCLN) is the most expensive stock on Wall Street per-share, with a price of almost $1,300. That makes it unpopular among smaller “retail” investors, but hasn’t stopped this high-growth travel company from winning big support from hedge funds and institutional investors.

#7 Hedge Fund Stock to Buy Now — Microsoft (MSFT)

microsoft-stock-msft

  • Sector: Information Technology
  • Market Cap: $370 billion
  • Hedge Funds Increasing Exposure: 19
  • Total Hedge Funds Owning Stock: 43
  • YTD Return: 20% vs. 6% for the S&P 500

Microsoft (MSFT) has been rising nicely for the last year or so on a companywide restructuring that involves a new CEO and the recently announced downsizing that will cut 18,000 jobs from MSFT.

#6 Hedge Fund Stock to Buy Now — Facebook (FB)

  • facebookSector: Social Media
  • Market Cap: $193 billion
  • Hedge Funds Increasing Exposure: 19
  • Total Hedge Funds Owning Stock: 44
  • YTD Return: 37% vs. 6% for the S&P 500

Facebook (FB) has proven that it’s not a mere social media fad but actually an advertising giant that is figuring out how to monetize its base — and a tech giant not afraid to make ambitious acquisitions to evolve.

#5 Hedge Fund Stock to Buy Now — Apple (AAPL)

  • Apple Rumors apple earnings aapl stockSector: Consumer Technology
  • Market Cap: $590 billion
  • Hedge Funds Increasing Exposure: 19
  • Total Hedge Funds Owning Stock: 53
  • YTD Return: 23% vs. 6% for the S&P 500

Apple (AAPL) continues to grow its iPhone business briskly, particularly in China, and investors are optimistic about a new line of products launching under the consumer technology giant in just several weeks.

#4 Hedge Fund Stock to Buy Now — Google (GOOG)

  • goog google stockSector: Information technology
  • Market Cap: $397 billion
  • Hedge Funds Increasing Exposure: 20
  • Total Hedge Funds Owning Stock: 44
  • YTD Return: 4% vs. 6% for the S&P 500

Google (GOOG) has lagged the market thanks to continual pressure on its online advertising business, however the company has big potential with divisions like its Android smartphone software that have long-term investors very bullish.

#3 Hedge Fund Stock to Buy Now — Time Warner Cable (TWC)

  • Time_Warner_CableSector: Telecommunications
  • Market Cap: $41 billion
  • Hedge Funds Increasing Exposure: 21
  • Total Hedge Funds Owning Stock: 36
  • YTD Return: 10% vs. 6% for the S&P 500

Time Warner Cable (TWC) is quite a boring company when compared with some of the other ambitious tech players on this list … but talk of a merger between TWC and Comcast has many institutional investors banking on a deal that creates an instant profit for shareholders.

#2 Hedge Fund Stock to Buy Now — Union Pacific (UNP)

UnionPacific185

  • Sector: Railroads
  • Market Cap: $93 billion
  • Hedge Funds Increasing Exposure: 21
  • Total Hedge Funds Owning Stock: 25
  • YTD Return: 23% vs. 6% for the S&P 500

Union Pacific (UNP) has catapulted to the front of the hedge fund pack lately with a massive 21 institutions increasing or initiating exposure out of only 25 total that own the stock. When it comes to stability, it’s hard to argue with a stock that is a virtual monopoly with a 2% dividend. And when it comes to growth, railroads like UNP will be the lifeblood of a recovery as they transport more goods around the U.S. economy.

#1 Hedge Fund Stock to Buy Now — eBay (EBAY)

eBay ebay stock

  • Sector: Internet retail
  • Market Cap: $65 billion
  • Hedge Funds Increasing Exposure: 24
  • Total Hedge Funds Owning Stock: 44
  • YTD Return: -3% vs. 6% for the S&P 500

Ebay (EBAY) has lagged the market in 2014, but hedge funds are piling in on the expectation of big future growth from its PayPal arm — and if investors like Carl Icahn get their way, a spinoff of the PayPal unit that would allow for faster growth and better returns to shareholders.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP


Article printed from InvestorPlace Media, https://investorplace.com/2014/08/hedge-fund-stocks-to-buy/.

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