To try and settle the contention that the company shows more liberal stories than conservative stories in its trending topics section, Facebook Inc (NASDAQ:FB) has agreed to revamp its trending topics feature so that there is less bias risk. Among the changes Facebook will make include eliminating the ability to assign an “importance level” to a topic through assessment of the topic’s prominence on the top-10 list of news outlets, more training for all reviewers that emphasized that content decisions may not be made on the basis of politics or ideology, and additional controls and oversight around the review team, including robust escalation procedures. Facebook Inc (NASDAQ:FB) investors hope the additional measures taken will put the filtering matter to rest and prevent any additional government probes or regulations down the road. Having said that, let’s analyze how smart money investors have positioned themselves in Facebook.
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Facebook Inc (NASDAQ:FB) investors should pay attention to an increase in activity from the world’s largest hedge funds recently. There were 164 hedge funds in our database with FB holdings at the end of March, up from 146 funds a quarter earlier. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Johnson & Johnson (NYSE:JNJ), General Electric Company (NYSE:GE), and Amazon.com, Inc. (NASDAQ:AMZN) to gather more data points.
When looking at the institutional investors followed by Insider Monkey, Viking Global, managed by Andreas Halvorsen, which initiated a stake during the quarter, holds the number one position in Facebook Inc (NASDAQ:FB). Viking Global has a $2.2972 billion position in the stock, comprising 10.1% of its 13F portfolio. Sitting at the No. 2 spot is Lone Pine Capital, led by Stephen Mandel, holding a $1.3023 billion position; 6.5% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish contain John Armitage’s Egerton Capital Limited, Philippe Laffont’s Coatue Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
On the next page, we are going to take a look at some funds that initiated stakes in Facebook during the first three months of 2016.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Viking Global, managed by Andreas Halvorsen, created the most valuable position in Facebook Inc (NASDAQ:FB), followed by Alex Snow’s Lansdowne Partners, which made a $423.6 million investment in the stock during the first quarter. The other funds with new positions in the stock are Rob Citrone’s Discovery Capital Management, David Tepper’s Appaloosa Management LP, and John Lykouretzos’s Hoplite Capital Management.
Let’s go over hedge fund activity in other stocks similar to Facebook Inc (NASDAQ:FB). These stocks are Johnson & Johnson (NYSE:JNJ), General Electric Company (NYSE:GE), Amazon.com, Inc. (NASDAQ:AMZN), and Wells Fargo & Co (NYSE:WFC). This group of stocks’ market caps resemble FB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JNJ | 77 | 5251691 | 5 |
| GE | 64 | 5476675 | 10 |
| AMZN | 133 | 14699954 | -8 |
| WFC | 90 | 29758121 | 5 |
As you can see these stocks had an average of 91 hedge funds with bullish positions and the average amount invested in these stocks was $13797 million. That figure was $14536 million in FB’s case. Amazon.com, Inc. (NASDAQ:AMZN) is the most popular stock in this table. On the other hand General Electric Company (NYSE:GE) is the least popular one with only 64 bullish hedge fund positions. Compared to these stocks, Facebook Inc (NASDAQ:FB) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
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