2. Coca-Cola Company (NYSE:KO)
Investors with Long Positions (as of June 30): 62
Aggregate Value of Investors’ Holdings (as of June 30): $19.54 Billion
Pepsi’s rival did indeed make the list also, with Coca-Cola Company (NYSE:KO) retaining its second-place position from the previous list, though the amount of hedge fund owners and their holdings in the stock each fell, from 65 and $21.71 billion respectively. The dip did not come from Warren Buffett, who left his monolithic stake of 400 million shares unchanged. His $15.69 billion position accounts for 80% of the holdings in the stock. The recent consolidation of Coca-Cola Company (NYSE:KO)’s bottlers should help Coca-Cola itself improve its bottom-line. In addition to Buffett, Donald Yacktman is also a big investor in Coca-Cola, having large stakes in both soft drink rivals.
1. Molson Coors Brewing Company (NYSE:TAP)
Investors with Long Positions (as of June 30): 66
Aggregate Value of Investors’ Holdings (as of June 30): $2.11 Billion
Molson Coors Brewing Company (NYSE:TAP) gets tapped by the smart money as the top consumer non-durables stock, moving up from fourth a quarter earlier. Hedge fund ownership increased by four during the quarter and though holdings were only up by about $50 million, it was during a quarter in which shares were down by 6%, so there was greater purchasing of shares than meets the eye. The alcohol-fueled love child of Canada’s Molson and the United States’ Coors in 2005, Molson Coors Brewing Company (NYSE:TAP) ranks as one of the largest breweries in the world, serving up beer to 50 countries globally. Billionaire James Dinan trimmed his stake by 14% to 3.21 million shares during the second quarter, while Eric Mandelblatt’s Soroban Capital Partners initiated a 1.71 million-share stake valued at over $119 million.
Hedge funds and other big money managers tend to have the largest amounts of their capital invested in large and mega-cap stocks like Coca-Cola Company (NYSE:KO) because these companies allow for much greater capital allocation. That’s why if we take a look at the most popular stocks among funds, we won’t find any mid- or small-cap stocks there. However, our backtests of hedge funds’ equity portfolios between 1999 and 2012 revealed that the 50 most popular stocks among hedge funds underperformed the market by seven basis points per month, showing that their most popular picks and the ones that received the bulk of their capital were not actually their best picks. On the other hand, their top small-cap picks performed considerably better, outperforming the market by 95 basis points per month. This was confirmed through backtesting and in forward tests of our small-cap strategy since August 2012. The strategy, which involves imitating the 15 most popular small-cap picks among hedge funds has provided gains of 118%, beating the broader market by over 60 percentage points through the end of July (see the details).
Disclosure: None
