These 10 stocks matter the most to hedge funds right now
Posted On August 24, 2022
Hedge funds this year have struggled, mostly on their big bets on the technology sector, though of late their performance has improved.
An average gain of 4% for equity hedge funds in the last two months has helped pull their performance against the broader market to roughly even for the year, according to an analysis from Goldman Sachs.
A team of analysts looked at 795 hedge funds’ long positions at the start of the third quarter based on filings as of Aug. 15 and published its 50-strong VIP list of “stocks that matter most” that appear most frequently among the top 10 long holdings within hedge fund portfolios.
Source: Solactive, FactSet, data compiled by Goldman Sachs Global Investment Research
Hedge fund of late have cut leverage and shifted back toward growth stocks, buying the likes of Apple and Amazon. The switch came from hedge funds slashing their positions in the energy and materials sector.
NVIDIA topped Goldman’s list of the largest short positions as of the end of July, a prescient call given the company’s profit warning in early August.
Source: FactSet, data compiled by Goldman Sachs Global Investment Research
Companies that see large increase in hedge fund holdings, Goldman Sachs says, can be strong signals for future stock performance.
Rising Stars, they call them, have typically ended up outperforming its peers during the quarters following their rise in popularity.
Rising Stars in the report include tech infrastructure company Switch Inc, SWCH,
which saw 23 hedge funds pour in during the second quarter, and energy firm Chevron Corporation CVX,
which had 20 more hedge funds own the stock.