With the 13Fs for the quarterly period ended June 30 already submitted, Insider Monkey has been working relentlessly to unveil some of the most indicative hedge fund moves relating to different stocks drawn from varying industries. This has included collecting 13F data and processing the same to provide useful information for investors. In this article, we will focus on five mega-cap stocks, which hedge funds have amassed substantial positions in.
We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 123% since then and outperformed the S&P 500 Index by around 65 percentage points (see more details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.
5. International Business Machines Corp. (NYSE:IBM)
Investors with Long Positions (as of June 30): 59
Aggregate Value of Investors’ Holdings (as of June 30): $14.82 Billion
In International Business Machines Corp. (NYSE:IBM), the number of hedge funds with long positions, out of the more than 700 investors that we track, increased by six during the second quarter. However, the aggregate value of their holdings went down by 2.34% to approximately 9.30% of the company’s outstanding stock. International Business Machines Corp. (NYSE:IBM) has recently announced an imminent partnership with GENCI, a French computing agency, to develop next generation computers, that deliver exascale computing capabilities. The success of the partnership would mean significantly better-performing computers, capable of delivering up to a billion billion calculations per second. The company’s stock has been down by 7.73% year-to-date. Warren Buffett’s Berkshire Hathaway is the biggest shareholder among the funds we track, holding 79.57 million shares valued at $12.94 billion, followed by Prem Watsa‘s Fairfax Financial Holdings, which also kept its stake unchanged at 1.36 million shares valued at $221.72 million.
4. The Coca-Cola Co (NYSE:KO)
Investors with Long Positions (as of June 30): 62
Aggregate Value of Investors’ Holdings (as of June 30): $19.54 Billion
Let’s now switch to the multinational beverage corporation The Coca-Cola Co (NYSE:KO) in which investors maintained their positions. During the second quarter of 2015, the number of hedge funds that were long on the stock was reduced by three, while the aggregate value of their investments slid by 10.00% and amassed 11.40% of the company’s market cap. The Coca-Cola Co (NYSE:KO) recently unveiled the opening of its new bottling plant in Laos as part of its strategy to expand its activities in Asia. While the company’s growth has been minimal, it has remained stable over the years. However, its biggest challenge is the fast growing bottled water sales as opposed to sodas whose consumption fell by 24.92% between 2000 and 2014, a trend that is expected to continue, moving forward. Since the beginning of the year, the company’s stock has tumbled by 6.61%. At the end of the second quarter of 2015, Berkshire Hathaway is also the largest shareholder of The Coca-Cola Co (NYSE:KO), owning 400.00 million shares as of the end of June.
3. Mastercard Inc (NYSE:MA)
Investors with Long Positions (as of June 30): 75
Aggregate Value of Investors’ Holdings (as of June 30): $7.74 Billion
Another mega-cap company, in which hedge funds chose to hoard their shares, was Mastercard Inc (NYSE:MA). While the number of hedge funds out of the ones tracked by Insider Monkey during the quarter went down by eight, the aggregate ownership of these funds was up by 1.52% during the quarter, representing 7.40% of the company’s portfolio. MasterCard, alongside other financial services companies, is facing charges over accusation of conspiring to overcharge ATM fees. In the company’s latest financial results, it posted earnings per share of $0.85, representing a 6% increase over the same quarter last year. The shares of Mastercard Inc (NYSE:MA) have rallied 9.27% year-to-date. At the end of the second quarter, Tom Russo‘s Gardner Russo & Gardner was the largest shareholder within our database, with a position of 10.03 million shares valued at $937.81 million.
2. Wells Fargo & Co (NYSE:WFC)
Investors with Long Positions (as of June 30): 91
Aggregate Value of Investors’ Holdings (as of June 30): $34.13 Billion
At the end of the second quarter, it was clear that hedge funds were bullish on Wells Fargo & Co (NYSE:WFC), with the number of long investors rising by 19 during the quarter. The aggregate ownership by these hedge funds shot up by 4.03% during the quarter, with that ownership representing 11.80% of the company’s equity. The banking and financial services company is currently a front runner in a bid to purchase General Electric’s railcar leasing unit. Year-to-date, Wells Fargo & Co (NYSE:WFC)’s stock has been down by 2.33%. Again, Berkshire Hathaway owns the largest position among the funds we follow, which contains 470.29 million shares. Billionaire Ken Fisher‘s Fisher Asset Management was also long on the stock at the end of the quarter with 18.70 million shares.
1. Allergan PLC (NYSE:AGN)
Investors with Long Positions (as of June 30): 151
Aggregate Value of Investors’ Holdings (as of June 30): $20.73 Billion
Finally, on the first spot is Allergan PLC (NYSE:AGN), the Irish pharmaceutical company, which also ranked as the most popular stock among the funds we track, even though the number of investors with long positions declined from 157. Nevertheless, the positions of these investors amass more than 17% of Allergan’s outstanding stock. The company, formerly known as Actavis, has recently announced a nationwide recall of some eye-treatment ointments sold under Refresh and Lacri-Lube brands among others, after some complaints from a small number of customers that a black particle can find its way into the ointment when its aluminum cap is unscrewed. In terms of stock performance, Allergan PLC (NYSE:AGN) has been up by 19.66% year-to-date. At the end of the second quarter, Andreas Halvorsen‘s Viking Globa, held 6.80 million shares of Allergan, followed by Daniel S. Och’s Management, which owns 3.68 million shares worth $1.12 billion.
Disclosure: None
