As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Alphabet Inc (NASDAQ:GOOGL).
Alphabet Inc (NASDAQ:GOOGL) has experienced an increase in support from the world’s most elite money managers of late. Alphabet Inc (NASDAQ:GOOGL) was in 185 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 179. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 179 hedge funds in our database with GOOGL positions at the end of the fourth quarter. Our calculations also showed that GOOGL ranked #4 among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Chris Hohn of TCI Fund Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s review the fresh hedge fund action regarding Alphabet Inc (NASDAQ:GOOGL).
Do Hedge Funds Think GOOGL Is A Good Stock To Buy Now?
At Q1’s end, a total of 185 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GOOGL over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Alphabet Inc (NASDAQ:GOOGL), with a stake worth $4460.2 million reported as of the end of March. Trailing Citadel Investment Group was Fisher Asset Management, which amassed a stake valued at $3544.3 million. TCI Fund Management, Viking Global, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position AltaRock Partners allocated the biggest weight to Alphabet Inc (NASDAQ:GOOGL), around 25.08% of its 13F portfolio. Fosse Capital Partners is also relatively very bullish on the stock, dishing out 21.91 percent of its 13F equity portfolio to GOOGL.
As one would reasonably expect, specific money managers have been driving this bullishness. Whale Rock Capital Management, managed by Alex Sacerdote, initiated the largest position in Alphabet Inc (NASDAQ:GOOGL). Whale Rock Capital Management had $596 million invested in the company at the end of the quarter. Christian Leone’s Luxor Capital Group also initiated a $235.1 million position during the quarter. The other funds with brand new GOOGL positions are Warren Lammert’s Granite Point Capital, Bruce Kovner’s Caxton Associates LP, and Adam Parker’s Center Lake Capital.
Let’s check out hedge fund activity in other stocks similar to Alphabet Inc (NASDAQ:GOOGL). We will take a look at Facebook Inc (NASDAQ:FB), Tesla Inc. (NASDAQ:TSLA), Alibaba Group Holding Limited (NYSE:BABA), Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM), Berkshire Hathaway Inc. (NYSE:BRK-B), JPMorgan Chase & Co. (NYSE:JPM), and Visa Inc (NYSE:V). This group of stocks’ market values resemble GOOGL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FB | 257 | 40967433 | 15 |
| TSLA | 62 | 10013166 | -6 |
| BABA | 135 | 15497689 | -21 |
| TSM | 76 | 10870661 | 4 |
| BRK-B | 111 | 19880791 | 1 |
| JPM | 111 | 5253689 | -1 |
| V | 164 | 26588103 | -2 |
| Average | 130.9 | 18438790 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 130.9 hedge funds with bullish positions and the average amount invested in these stocks was $18439 million. That figure was $24574 million in GOOGL’s case. Facebook Inc (NASDAQ:FB) is the most popular stock in this table. On the other hand Tesla Inc. (NASDAQ:TSLA) is the least popular one with only 62 bullish hedge fund positions. Alphabet Inc (NASDAQ:GOOGL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GOOGL is 88.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Hedge funds were also right about betting on GOOGL as the stock returned 17.8% since the end of Q1 (through 6/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
