Alphabet Inc (NASDAQ:GOOGL)’s Google is in the spotlight today after the company announced some major changes in its advertisement tools. Google is now introducing local search ads on its search engine and Google Maps. This feature would allow companies to pay Google to show their business in search results of Google Maps. Google also announced “Promoted Pins” feature, which will show the logos of different businesses on Google Maps. In a statement, Sridhar Ramaswamy, Google’s senior vice president of ads and commerce, said that the new features will help businesses drive more traffic to their stores. Google is also increasing the size of ads in its search results. The title length and description limit are also increased in the latest revamp. The stock is slightly in the green today, but it has lost 5.3% since the beginning of the year. Nevertheless, the hedge fund sentiment towards Alphabet has been on the rise lately.
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In the 21st century investor’s toolkit there are a large number of methods market participants use to grade publicly traded companies. A pair of the most innovative methods are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the top money managers can trounce the broader indices by a very impressive amount (see the details here).
Keeping this in mind, let’s check out the latest action surrounding Alphabet Inc (NASDAQ:GOOGL).
What does the smart money think about Alphabet Inc (NASDAQ:GOOGL)?
Heading into the second quarter of 2016, a total of 155 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 1% from the previous quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Andreas Halvorsen’s Viking Global has the biggest position in Alphabet Inc (NASDAQ:GOOGL), worth close to $1.5643 billion, amounting to 6.9% of its total 13F portfolio. Coming in second is Lansdowne Partners, led by Alex Snow, holding a $1.32 billion position; the fund has 10.4% of its 13F portfolio invested in the stock. Other professional money managers that are bullish include Ken Fisher’s Fisher Asset Management, Dan Loeb’s Third Point and Stephen Mandel’s Lone Pine Capital.
On the next page, we are going to take a look at some funds that initiated stakes in Alphabet during the first quarter. However, 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 Alphabet Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Berkshire Hathaway Inc. (NYSE:BRK.B) to gather more data points.
As one would reasonably expect, key money managers have jumped into Alphabet Inc (NASDAQ:GOOGL) headfirst. Third Point, managed by Dan Loeb, assembled the biggest position in Alphabet Inc (NASDAQ:GOOGL). Third Point had $534 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $125.1 million position during the quarter. The other funds with new positions in the stock are Alexander Mitchell’s Scopus Asset Management, Nick Niell’s Arrowgrass Capital Partners, and Matthew Tewksbury’s Stevens Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Alphabet Inc (NASDAQ:GOOGL) but similarly valued. We will take a look at Alphabet Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), Berkshire Hathaway Inc. (NYSE:BRK-B), and Exxon Mobil Corporation (NYSE:XOM). This group of stocks’ market values are similar to GOOGL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GOOG | 142 | 14902723 | 0 |
| MSFT | 144 | 20830664 | 4 |
| BRK-B | 71 | 19576045 | -4 |
| XOM | 60 | 2500727 | -8 |
As you can see these stocks had an average of 104.25 hedge funds with bullish positions and the average amount invested in these stocks was $14.45 billion. That figure was $14.98 villion in GOOGL’s case. Microsoft Corporation (NASDAQ:MSFT) is the most popular stock in this table. On the other hand, Exxon Mobil Corporation (NYSE:XOM) is the least popular one with only 60 bullish hedge fund positions. Compared to these stocks, Alphabet Inc (NASDAQ:GOOGL) 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.
Disclosure: None
