Best stocks to invest in – Are Hedge Fund Managers the New Value Investors?



Best stocks to invest in


Welcome to Episode #32 of the Zacks Market Edge Podcast.


Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.


In this episode, Tracey is joined by Kevin Cook, Zacks Senior Stock Strategist and the editor of the Follow the Money Trader and Tactical Trader.


The first quarter 13-F form filings are out. Any firm with assets of more than $100 million had to disclose their latest investing moves. Kevin follows these moves closely in the Follow the Money Trader and he’s been seeing some interesting trades.


These filings are always backward looking. The first quarter of this year included the big stock sell off so it’s not surprising that many managers used that as an opportunity to jump into new positions.



What were they buying?


Gold was a big one. Blackrock bought an 8.4 million share position in the SPDR Gold ETF (GLD). Eton Park also bought a 3.6 million position. In addition to buying the physical metal, George Soros started a new position in miner Barrick Gold (ABX). The gold miners have rallied hard in 2016.


Another hot commodity area for hedge fund managers has been the fertilizers. Unlike energy and the miners, this group is still trading near multi-year lows. T. Rowe Price added 7 million shares of fertilizer giant CF Industries (CF).


However, ValueAct manager Jeffrey Ubben actually sold a chunk of his Agrium (AGU). His $10 billion portfolio holds just 13 positions with Microsoft his largest position at 31.2% of the long portfolio. The Agrium position was small at under 3% of the long portfolio.


Some fund managers have also been diving into the regional bank stocks.


JPMorgan Chase bought 15 million shares of $10 billion market cap KeyCorp (KEY) in the quarter but several small fund managers were diving into the small-cap regional banks. Which ones were at the top of their lists? Should you be getting in as well?


The larger hedge funds weren’t shy in adding to positions in the first quarter. Kevin watches Maverick Capital closely. It added to its Broadcom (AVGO) position in the quarter despite Apple’s issues.


Many of the buys in the first quarter were value oriented. They were in sectors and industries that were beaten up or out of favor.


Are the hedge fund managers sending a message about the market by suddenly acting like value investors? Find out in this week’s podcast.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
BROADCOM LTD (AVGO): Free Stock Analysis Report
 
SPDR-GOLD TRUST (GLD): ETF Research Reports
 
CF INDUS HLDGS (CF): Free Stock Analysis Report
 
BARRICK GOLD CP (ABX): Free Stock Analysis Report
 
KEYCORP NEW (KEY): Free Stock Analysis Report
 
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