PayPal was launched 21 years ago to disrupt the money transfer market. Today, it is one of the giants in the payments market behind American Express, Visa, Mastercard, but ahead of Western Union and Moneygram. Facebook Inc is trying to disrupt the same market right now, but hindered by political pressure. Legacy financial companies like JP Morgan, Citigroup, and Bank of America don’t seem to be doing much to protect their turf. So, how are hedge funds trading these financial stocks?
In our opinion one of the best tools for ordinary investors who are on the hunt for new ideas is 13F filings. Once every quarter hedge funds with at least $100 million in total positions in publicly traded US stocks are required to open the kimono and disclose the number of shares and the total value of its positions in each of the stocks and options in its portfolio. On Thursday, around 600 hedge funds which waited till the last minutes of the filing deadline disclosed their US equity holdings as of September 30th. Another 150 hedge funds disclosed their positions a few days earlier.
Hedge funds hire some of the smartest Ivy League graduates as their analysts, have access to industry insiders whom they “consult” with, unconventional data sources that cost tens of thousands of dollars, years of experience and millions of dollars as incentives to come up with the next great investment idea. Every quarter we process around 750 hedge funds’ 13F filings to identify each hedge fund’s new moves, top stock picks, and more importantly overall sentiment changes towards each of the 4000 stocks that are publicly trading. We publish all of our analysis in our premium quarterly newsletter (download a free sample), and then share interesting bits and pieces on our website.
Yesterday we published the list of 30 most popular stocks among hedge funds. This list’s top 20 stock picks have been performing much better than the market indices that you see on your financial news websites and channels. In 2019 the top 20 most popular hedge fund stocks returned nearly 34% and outperformed the S&P 500 Index by more than 8 percentage points. If you have $500,000 invested in an index fund that tracks the market, you left $40,000 on the table this year by not imitating hedge funds’ top 20 stock picks.
Previously we listed the 5 mega-cap stocks that hedge funds are crazy about (stocks with at least $100 billion in market capitalization) and 5 very large-cap stocks hedge funds are buying (market caps between $60 billion and 100 billion). In this article we will list the top 5 financial stocks hedge funds are crazy about. Hedge funds have been very bullish about these stocks for a very long time and these stocks rewarded their investors in return.
Later this weekend we will publish similar rankings for large-cap stocks, mid-cap stocks, small-cap stocks, micro-cap stocks. We will also publish similar rankings for top IPO stocks among hedge funds, top biotech stocks, and top dividend stocks.
Below is our video about the 5 most popular stocks among hedge funds. The list of top 5 stocks hasn’t changed since the end of March.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Here is our list of the 5 financial stocks hedge funds are piling into:
5. Citigroup Inc. (NYSE:C): $74.40
Number of Hedge Funds: 93
Total Dollar Amount of Long Hedge Fund Positions:$10.3 billion
Percent of Hedge Funds with Long Positions: 12.4%
Fourth Quarter Return (through November 14th): 7.7%
Popularity Ranking (Q2): 18
Noteworthy Hedge Fund Shareholders: Jeffrey Ubben, Boykin Curry
Ken Wolter / Shutterstock.com
4. PayPal Holdings, Inc. (NASDAQ:PYPL): $104
Number of Hedge Funds: 95
Total Dollar Amount of Long Hedge Fund Positions:$4.1 billion
Percent of Hedge Funds with Long Positions: 12.7%
Fourth Quarter Return (through November 14th): 0.1%
Popularity Ranking (Q2): 12
Noteworthy Hedge Fund Shareholders: Peter Rathjens, Bruce Clarke and John Campbell, Dan Loeb
www.BillionPhotos.com / Shutterstock.com
3. Bank of America Corporation (NYSE:BAC): $33
Number of Hedge Funds: 95
Total Dollar Amount of Long Hedge Fund Positions:$32.1 billion
Percent of Hedge Funds with Long Positions: 12.7%
Fourth Quarter Return (through November 14th): 12.1%
Popularity Ranking (Q2): 13
Noteworthy Hedge Fund Shareholders: Warren Buffett, Richard S. Pzena
Warren Buffett of Berkshire Hathaway
2. Mastercard Incorporated (NYSE:MA): $281
Number of Hedge Funds: 115
Total Dollar Amount of Long Hedge Fund Positions:$13.2 billion
Percent of Hedge Funds with Long Positions: 15.4%
Fourth Quarter Return (through November 14th): 3.1%
Popularity Ranking (Q2): 10
Noteworthy Hedge Fund Shareholders: Tom Russo, Charles Akre
Pixabay/Public Domain
1. Visa Inc. (NYSE:V): $180
Number of Hedge Funds: 132
Total Dollar Amount of Long Hedge Fund Positions:$15.7 billion
Percent of Hedge Funds with Long Positions: 17.6%
Fourth Quarter Return (through November 14th): 4.7%
Popularity Ranking (Q2): 7
Noteworthy Hedge Fund Shareholders: Ken Fisher, Warren Buffett
JMiks / Shutterstock.com
Disclosure: None. This article is originally published at Insider Monkey.
