Tuesday, May 29, 2012

13 Top Hedge Fund Holdings that Look Promising!


13 Top Hedge Fund Holdings that Look Promising!

Last week, I discussed the dismal returns that hedge funds have been giving their investors since they last beat the S&P 500 in 2008. And I noted that the returns suffered due, primarily, to high management fees and lots of turnover.

Today, I want to share with you another reason why hedge fund returns may be lagging: Picking the wrong stocks!

Clearly—although certainly still volatile—you can see that the market has been on the rise for the past six months. But hedge funds returns don’t imitate that. And that may be because their most popular holdings are stocks that—on a technical basis—don’t look very attractive at all.


Goldman Sachs just revealed the top 50 holdings of hedge funds. I decided to look at each individually and put them through my technical analysis screen. And I have to say that even I was amazed at the results!

Of those top 50 stocks, only 13 were rated Buy or Strong Buy by my indicators. Six were Holds and the rest were rated Sell or Strong Sell. Here are the 13 that look the best:

Company
Symbol
Price ($)
Technical Rating
Analyst Reco
Apple
AAPL
572.27
Buy
1.7
Delphi Automotive
DLPH
29.84
Buy
1.6
Tyco
TYC
54.60
Buy
2.0
Visa
V
120.28
Buy
1.9
Yahoo
YHOO
15.47
Buy
2.6
WellPoint
WLP
68.84
Buy
2.0
Charter Communications
CHTR
64.63
Buy
2.0
eBay
EBAY
41.49
Strong Buy
2.0
Equinix
EQIX
167.32
Strong Buy
1.9
Dollar Thrifty
DTG
81.89
Strong Buy
2.6
Mastercard
MA
416.05
Buy
1.9
News Corp
NWSA
19.69
Buy
2.2
Williams Companies
WMB
31.39
Buy
1.9

Now, I’m not suggesting that you run out and buy these stocks. And please note that technical ratings are pretty short-term in nature. But if you want to start building your own hedge fund, these might be some companies to consider.

Tomorrow, I’ll tell you about all the popular hedge fund holdings that look a lot more like sells than buys to me!

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