Top Stocks of the Biggest Hedge Funds

When considering investments, individual investors often take a look at what the biggest players are doing. A new report breaks down the top stocks held by the largest hedge funds.

In the first quarter of 2014 the 50 largest hedge funds increased their equity exposure by 1.9%. Verizon saw the largest increase in exposure as funds increased their positions by 328% ($2.9 billion). eBay also grew quickly by 109%.

Although only 2 healthcare companies appears in the top 10, and just 5 appear in the top 49 stocks, the top hedge funds added the most exposure to the Health Care sector. This was driven by increased interest in Actavis with exposure increasing 6.7%, or $1.7 billion, as well as Illumina.

Telecommunications Services and Consumer Discretionary also saw large increases in exposure by the largest hedge funds, according to FactSet’s data. Meanwhile, Financials took the biggest hit in the first quarter of 2014.

This doesn’t quite match up with the S&P 500’s market value change for these sectors as Financials actually had a positive market value change while Consumer Discretionary had the largest decrease in market value. According to FactSet, Consumer Discretionary is the hedge funds’ most heavily overweight sector, while Consumer Staples is the most heavily underweight.

(Stock price from Yahoo! Finance, all other data from FactSet. Stocks are ranked by the aggregate amount of stock held, in the millions, by the 50 largest hedge funds)

10. Twenty-First Century Fox

Symbol: FOX

Sector: Consumer Discretionary

Current price: $33.86

Funds holding: 22

Market value held by funds (millions): $4,268

Revenue from Fox’s TV segment increased 32% following the Super Bowl and the NFL Playoffs. However, year to date the stock price is down 4%. People who bought the stock during the depths of the recession are happy with their purchase, though. Fox’s stock price is up 239% from 5 years ago when its price was just $9.93.

Fox has 9.2% of shares outstanding.

9. Air Products

Symbol: APD

Sector: Materials

Current price: $118

Funds holding: 18

Market value held by funds (millions): $4,369

The company provides atmospheric gases, process and specialty gases, performance materials, equipment, and services worldwide. Since the beginning of the year, the stock is up 6%, and it is up 26% from a year ago.

Hedge fund titan Bill Ackman holds a 10% stake in the company and said he sees the stock rising to $200 within 3 years. APD has 17.3% of shares outstanding.

8. Liberty Global

Symbol: LBTYA

Sector: Consumer Discretionary

Current price: $45.19

Funds holding: 20

Market value held by funds (millions): $4,408

Liberty Global provides video, broadband Internet, fixed-line telephony, and mobile services in Europe, Chile, Puerto Rico, and elsewhere internationally. In March, the company acquired the remaining 20% in Chile’s largest cable operator.

After its stock price fell from the beginning of the year, Liberty Global’s stock is back where it started at the beginning of the year. The company has 19.5% of its shares outstanding.

7. Thermo Fisher Scientific

Symbol: TMO

Sector: Health Care

Current price: $116.04

Funds holding: 20

Market value held by funds (millions): $4,667

During the first quarter of 2014, Thermo Fisher completed a $13.6 billion acquisition of Life Technologies. Following the finalization of the deal, the stock increased roughly 12% over the next month before steadily falling since the middle of March.

Currently, the stock price is up 6% from the beginning of the year. The company has 9.9% shares outstanding.

6. Walgreen Co.

Symbol: WAG

Sector: Consumer Staples

Current price: $70.20

Funds holding: 20

Market value held by funds (millions): $4,749

Exposure to Walgreen increased by 52%, or $1.6 billion, in the first quarter of 2014, which makes it one of the stocks with the largest increased exposure. Its stock price is up 23% year to date. In early February, after CVS Caremark announce it would no longer sell cigarettes and tobacco products, Walgreen’s stock increased over the days following the news.

Walgreen has just 7.5% of shares outstanding.

5. American International Group

Symbol: AIG

Sector: Financials

Current price:

Funds holding: 25

Market value held by funds (millions): $4,753

Dealbreaker.com

AIG’s stock is up 6% so far this year, but depending on how long you’ve held the stock that might not mean much. For instance, if you bought at the depths of the recession, then AIG’s stock has soared 665% from when it hit $7. However, if you owned AIG at the company’s high point back in November 2000, then the stock is still down 97% from when it hit $1,971.25.

AIG only has 6.5% of its shares outstanding.

4. Valeant Pharmaceuticals

Symbol: VRX

Sector: Health Care

Current price: $131.08

Funds holding: 18

Market value held by funds (millions): $6,449

Like the rest of the stock market, Valeant has had a rocky start to the year, although the stock price is still up 12% year to date. From a year ago, the pharmaceutical company’s stock is up 75%.

Valeant, which has 14.7% of shares outstanding, has been making overtures toward Allergan, though the Botox-maker has rebuffed advances, so far.

3. Microsoft

Symbol: MSFT

Sector: Information Technology

Current price: $40.19

Funds holding: 23

Market value held by funds (millions): $6,865

From the beginning of the year Microsoft’s stock price is only up 8%, although it is near the top of the 52-week range. The company has just 2% of its shares outstanding.

However, Bill Gates, founder and former chief executive and chairman of Microsoft, recently sold 4.6 million shares. According to Reuters, he is on track to own no Microsoft stock at all in 4 years. Gates’ philanthropy has largely been funded by his Microsoft fortune.

Up next is Microsoft’s technology rival…

2. Apple

Symbol: AAPL

Sector: Information Technology

Current price: $608.65

Funds holding: 23

Market value held by funds (millions): $8,365

Manhattan Apple store

Apple only has 1.7% of its shares outstanding for purchase. There is always something in the pipeline at Apple getting investors excited, whether it’s a deal to buy Beats (apparently happening, but nothing announced, yet), the rumored iWatch, or the next iteration of the iPhone.

The company is still coming back from when its stock took a beating in the first months of 2013. Since the beginning of the year, Apple’s stock is up 10%, and it is up 37% from a year ago, when the stock was $442.14.

According to FactSet, Apple was the largest sale of 4 of the funds.

1. Icahn Enterprises

Symbol: IEP

Sector: Consumer Discretionary

Current price: $100.52

Funds holding: 2

Market value held by funds (millions): $10,570

Carl Icahn. Forbes.com

Icahn Enterprises is only held by 2 funds, but the market value is far beyond any other stock on this list. Carl Icahn, the chairman of the board, has a 90.5% personal stake in the company, which is used for him to own his subsidiary businesses. Icahn Enterprises has 88% of shares outstanding.