Image may be NSFW.
Clik here to view.
- Ben Snider, a strategist at Goldman Sachs, put together a list of outperforming stocks that have recently been heavily favored by hedge-fund managers.
- These stocks can be a leading indicator of future returns.
- Since 2001, Goldman's "VIP" stocks have trounced the S&P 500 on a quarterly basis 61% of the time, and they've outperformed by 6.37% so far in 2020.
- All of the stocks Snider selected occupy a top 10 position in a large number of hedge-fund portfolios.
- Click here for more BI Prime stories.
For investors, the first five months of 2020 have been about as calm as an F5 tornado.
After all, who could've anticipated the fastest bear market on record, a 35%-plus rally, 39 million jobless claims, unprecedented Federal Reserve stimulus, and a pandemic— all in a little over three months?
For investors grappling with these mercurial gyrations, a good place to look is the portfolios of hedge-fund managers. According to data compiled by Goldman Sachs, heavy interest from hedge funds has been a leading indicator of future gains throughout recent history.
Below is a chart comparing the returns of Goldman Sachs' Hedge Fund VIP Index — a fund that encompasses the top bullish positions of fundamentally focused hedge funds — with those of the S&P 500.
Image may be NSFW.
Clik here to view.
Since the market bottomed out on March 23, this basket of "VIP" stocks has trounced the S&P 500 by 8%. On a year-to-date basis, it's outperformed by 6.37%. If we zoom out even further, since 2001, it's outperformed 61% of the time on a quarterly basis.
"From an implementation standpoint, the Hedge Fund VIP list represents a tool for investors seeking to 'follow the smart money' based on 13-F filings," Ben Snider, a strategist at Goldman Sachs, said. "For this analysis, we limit our universe to hedge funds with 10 to 200 distinct equity positions in an attempt to isolate fundamentally-driven investors from quantitative funds or funds that mirror private equity investments."
Listed below are 25 stocks Snider and his Goldman colleagues found especially enticing to hedge-fund managers. They're listed in increasing order of how many funds hold the stock in a top 10 position.
25. RingCentral
Image may be NSFW.Clik here to view.
Ticker: RNG
Number of hedge funds with stock as top 10 holding: 17
Year-to-date total return: 56%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
24. GoDaddy
Image may be NSFW.Clik here to view.
Ticker:GDDY
Number of hedge funds with stock as top 10 holding: 17
Year-to-date total return: 11%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
23. ServiceNow
Image may be NSFW.Clik here to view.
Ticker:NOW
Number of hedge funds with stock as top 10 holding: 18
Year-to-date total return: 33%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
22. Sea Ltd. (Singapore)
Image may be NSFW.Clik here to view.
Ticker:SE
Number of hedge funds with stock as top 10 holding: 18
Year-to-date total return: 73%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
21. Adobe
Image may be NSFW.Clik here to view.
Ticker:ADBE
Number of hedge funds with stock as top 10 holding: 18
Year-to-date total return: 12%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
20. UnitedHealth Group
Image may be NSFW.Clik here to view.
Ticker:UNH
Number of hedge funds with stock as top 10 holding: 19
Year-to-date total return: 0%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
19. JD.com
Image may be NSFW.Clik here to view.
Ticker:JD
Number of hedge funds with stock as top 10 holding: 19
Year-to-date total return: 58%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
18. Centene
Image may be NSFW.Clik here to view.
Ticker:CNC
Number of hedge funds with stock as top 10 holding: 19
Year-to-date total return: 8%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
17. Activision Blizzard
Image may be NSFW.Clik here to view.
Ticker:ATVI
Number of hedge funds with stock as top 10 holding: 20
Year-to-date total return: 23%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
16. Uber Technologies
Image may be NSFW.Clik here to view.
Ticker:UBER
Number of hedge funds with stock as top 10 holding: 22
Year-to-date total return: 13%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
15. PG&E
Image may be NSFW.Clik here to view.
Ticker:PCG
Number of hedge funds with stock as top 10 holding: 23
Year-to-date total return: 13%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
14. Tiffany
Image may be NSFW.Clik here to view.
Ticker:TIF
Number of hedge funds with stock as top 10 holding: 24
Year-to-date total return: -4%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
13. Salesforce
Image may be NSFW.Clik here to view.
Ticker:CRM
Number of hedge funds with stock as top 10 holding: 27
Year-to-date total return: 6%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
12. Apple
Image may be NSFW.Clik here to view.
Ticker:AAPL
Number of hedge funds with stock as top 10 holding: 30
Year-to-date total return: 8%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
11. Mastercard
Image may be NSFW.Clik here to view.
Ticker:MA
Number of hedge funds with stock as top 10 holding: 37
Year-to-date total return: -3%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
10. Visa
Image may be NSFW.Clik here to view.
Ticker:V
Number of hedge funds with stock as top 10 holding: 38
Year-to-date total return: 2%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
9. Netflix
Image may be NSFW.Clik here to view.
Ticker:NFLX
Number of hedge funds with stock as top 10 holding: 38
Year-to-date total return: 40%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
8. Fidelity National
Image may be NSFW.Clik here to view.
Ticker:FIS
Number of hedge funds with stock as top 10 holding: 38
Year-to-date total return: -2%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
7. PayPal
Image may be NSFW.Clik here to view.
Ticker:PYPL
Number of hedge funds with stock as top 10 holding: 40
Year-to-date total return: 35%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
6. Charter Communications
Image may be NSFW.Clik here to view.
Ticker:CHTR
Number of hedge funds with stock as top 10 holding: 40
Year-to-date total return: 7%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
5. Alibaba
Image may be NSFW.Clik here to view.
Ticker:BABA
Number of hedge funds with stock as top 10 holding: 57
Year-to-date total return: 1%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
4. Alphabet
Image may be NSFW.Clik here to view.
Ticker:GOOGL
Number of hedge funds with stock as top 10 holding: 58
Year-to-date total return: 3%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
3. Facebook
Image may be NSFW.Clik here to view.
Ticker:FB
Number of hedge funds with stock as top 10 holding: 98
Year-to-date total return: 4%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
2. Microsoft
Image may be NSFW.Clik here to view.
Ticker:MSFT
Number of hedge funds with stock as top 10 holding: 108
Year-to-date total return: 18%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
1. Amazon
Image may be NSFW.Clik here to view.
Ticker:AMZN
Number of hedge funds with stock as top 10 holding: 139
Year-to-date total return: 31%
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research