Goldman Sachs publishes a comprehensive quarterly report based on 13F filings that takes time to prepare. The data team at Insider Monkey finished processing 13F filings, and we had some time on our hands. So, we decided not to wait for Goldman Sachs to publish its report.
After all, Goldman Sachs’ methodology is pretty straightforward. Goldman Sachs hedge fund VIP List “contains the 50 stocks that appear most frequently among the top 10 holdings of fundamentally-driven hedge fund portfolios.” Insider Monkey is probably more selective in its hedge fund list, but at least 90% of the hedge funds are likely in the same list.
Identifying the top 10 holdings of a hedge fund is a no-brainer. We considered only top 10 stock holdings of each hedge fund and excluded options or convertible notes positions.
We also noticed that focusing on the top 10 positions of a hedge fund is quite arbitrary. Does a hedge fund really have 10 great ideas every quarter? Our experience shows that a good hedge fund can come up with two to three good ideas every year.
So, we decided to compile other VIP Stock Lists that are based on each hedge fund’s top five, top three, top two and very top holdings. If the same names consistently come up in our list, then we can eliminate the arbitrariness of the “top 10” positions.
We didn’t have time to conduct back tests on these VIP Lists. Goldman claims that its VIP list managed to outperform the market by about 3% per year between 2001 and 2010. We think this number could be improved by restricting the list to the top two to three positions of hedge funds.
We also compiled the list of 10 most popular stocks among hedge funds, but Allergan wasn’t in the top three in that list. Goldman’s VIP List is more similar to our billionaires’ top stocks list. Facebook Inc (NASDAQ:FB) ranks number four in Goldman’s list whereas it wasn’t among the top 10 in the billionaires’ list. This indicates that we get a slightly different list every time we use a slightly different criteria.
One interesting stock that showed up in Goldman’s list is Covidien plc (NYSE:COV). Covidien isn’t one of the top 30 stocks among all hedge funds (no restrictions), yet it shows up in this list. This means hedge funds are more likely to place a large bet on Covidien than a small one.
An Approximation for Goldman’s VIP List
The following list includes each company name, ticker, top 10 holding and value (x 1000).
Actavis plc (NYSE:ACT) , 57 , 9325351
Apple Inc. (NASDAQ:AAPL) , 52 , 16106272
Allergan, Inc. (NYSE:AGN) , 52 , 15363015
Facebook Inc (NASDAQ:FB) , 48 , 4962961
American Airlines Group Inc (NASDAQ:AAL) , 45 , 3808322
Citigroup Inc (NYSE:C) , 45 , 6338888
Covidien plc (NYSE:COV) , 45 , 9396613
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) , 40 , 11092766
Baidu Inc (ADR) (NASDAQ:BIDU) , 38 , 5378019
Ally Financial Inc (NYSE:ALLY) , 37 , 4710267
Liberty Global plc (NASDAQ:LBTYK) , 37 , 7204701
Microsoft Corporation (NASDAQ:MSFT) , 36 , 13387143
American International Group Inc (NYSE:AIG) , 35 , 7982485
Micron Technology, Inc. (NASDAQ:MU) , 35 , 4975580
Time Warner Cable Inc (NYSE:TWC) , 34 , 6805400
Delta Air Lines, Inc. (NYSE:DAL) , 31 , 4189120
Alibaba Group Holding Ltd (NYSE:BABA) , 29 , 4543248
Yahoo! Inc. (NASDAQ:YHOO) , 29 , 3859147
Air Products and Chemicals, Inc. (NYSE:APD) , 28 , 7254865
Liberty Interactive Group (NASDAQ:QVCA) , 28 , 1866281
Directv (NASDAQ:DTV) , 27 , 8551520
General Motors Company (NYSE:GM) , 27 , 1833335
Cheniere Energy, Inc. (NYSEMKT:LNG) , 27 , 5232694
Charter Communications, Inc. (NASDAQ:CHTR) , 26 , 4183112
Wells Fargo & Co (NYSE:WFC) , 26 , 31227350
Berkshire Hathaway Inc. (NYSE:BRK.B) , 25 , 18250347
Gilead Sciences, Inc. (NASDAQ:GILD) , 25 , 2025365
Google Inc (NASDAQ:GOOG) , 24 , 1719116
Northstar Realty Finance Corp (NYSE:NRF) , 23 , 870417
Bank of America Corp (NYSE:BAC) , 22 , 3501114
eBay Inc (NASDAQ:EBAY) , 22 , 8125003
Google Inc (NASDAQ:GOOGL) , 22 , 1393933
Mastercard Inc (NYSE:MA) , 22 , 5307368
NorthStar Asset Management Group Inc (NYSE:NSAM) , 22 , 1108685
SunEdison Inc (NYSE:SUNE) , 22 , 2047856
Dollar General Corp. (NYSE:DG) , 21 , 4248491
Dish Network Corp (NASDAQ:DISH) , 20 , 1229867
Constellation Brands, Inc. (NYSE:STZ) , 20 , 2403496
Tribune Media Co (NYSE:TRCO) , 20 , 2701249
Cubist Pharmaceuticals Inc (NASDAQ:CBST) , 19 , 1818658
Twenty-First Century Fox Inc (NASDAQ:FOXA) , 19 , 3987785
CBS Corporation (NYSE:CBS) , 18 , 3005426
Hertz Global Holdings, Inc. (NYSE:HTZ) , 18 , 4265268
Liberty Global plc (NASDAQ:LBTYA) , 18 , 801513
Macquarie Infrastructure Company LLC (NYSE:MIC) , 18 , 1265133
Priceline Group Inc (NASDAQ:PCLN) , 18 , 3357516
Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) , 18 , 2397804
Visteon Corp (NYSE:VC) , 18 , 998704
Brookdale Senior Living, Inc. (NYSE:BKD) , 17 , 1084378
EMC Corporation (NYSE:EMC) , 17 , 2683759
Pfizer Inc. (NYSE:PFE) , 17 , 2712800
Refer to Goldman’s Hedge Fund VIP List And More: 50 Stocks That Matter Most on Insider Monkey for the 50 stocks in the top five stock positions in each hedge fund’s 13F portfolio, the top 50 stocks that are among the top three stock positions in hedge funds’ portfolio and the most popular #1 stock picks of nearly 750 equity hedge funds.