20 Stocks Under The Control Of Hedge Funds

Goldman Sachs recently released its new “Hedge Fund Trend Monitor,” giving clients a glimpse into the investment moves and strategies by 708 of the world’s biggest funds.
In the report, Goldman lays out the 20 most “concentrated” stocks, meaning a large share of their market capitalisation is owned in aggregate by hedge funds.

In upward trending markets, buying these 20 stocks has been a successful strategy. Less so in a “choppy or flat” market. From the report:

The “most concentrated” stocks lagged for most of 2007 and 2008, but significantly outperformed in 2009 (81.4% vs. 26.5%) and 2010 (15.9% vs. 15.1%). Our “most concentrated” basket underperformed the S&P 500 by 391 bp in 2011 (-1.8% vs. 2.1%) but outperformed by 814 bp in 2012 (24.1% vs. 16.0%).

We ranked the stocks based on the percentage of equity cap owned by hedge funds and included the three funds with the largest stake.

20. E*TRADE Financial

Ticker: ETFC

Sector: Investment Banking & Brokerage

% owned by hedge funds: 18%

2Q Return: 18%

YTD Return: 63%

Major Owners: Omega Advisors (7.9 million shares), Select Equity Group (7.6 million shares), Southpoint Capital Advisors (7.5 million shares)

Source: Goldman Sachs, Bloomberg

19. Legg Mason

Ticker: LM

Sector: Asset Management & Custody Banks

% owned by hedge funds: 18%

2Q Return: -3%

YTD Return: 29%

Major Owners: Trian Fund Management (12.8 million shares), Greenlight Capital (2.3 million shares), QVT Financial (842,000 shares)

Source: Goldman Sachs, Bloomberg

18. Wyndham Worldwide

Ticker: WYN

Sector: Hotels Resorts & Cruise Lines

% owned by hedge funds: 18%

2Q Return: -11%

YTD Return: 13%

Major Owners: Iridian Asset Management (5.4 million shares), Lone Pine Capital (4.7 million shares), Partner Fund Management (2.9 million shares)

Source: Goldman Sachs, Bloomberg

17. Zoetis Inc

Ticker: ZTS

Sector: Pharma

% owned by hedge funds: 19%

2Q Return: -7%

YTD Return: NM

Major Owners: Pentwater Capital Management (16.1 million shares), SAC Capital Advisors (7.5 million shares), DE Shaw & Company (6.1 million shares)

Source: Goldman Sachs, Bloomberg

16. Dollar Tree

Ticker: DLTR

Sector: General Merchandise Stores

% owned by hedge funds: 19%

2Q Return: 5%

YTD Return: 26%

Major Owners: Lone Pine Capital (8 million shares), Eton Park Capital Management (5.7 million shares), Blue Ridge Capital (4.2 million shares)

Source: Goldman Sachs, Bloomberg

15. Beam Inc.

Ticker: BEAM

Sector: Distillers & Vintners

% owned by hedge funds: 19%

2Q Return: 0%

YTD Return: 3%

Major Owners: Pershing Square (20.8 million shares), Citadel Advisors (1.3 million shares), York Capital Management (929,000 shares)

Source: Goldman Sachs, Bloomberg

14. Motorola Solutions

Ticker: MSI

Sector: Communications Equipment

% owned by hedge funds: 20%

2Q Return: -9%

YTD Return: 3%

Major Owners: ValueAct Holdings (28.9 million shares), Fir Tree Incorporated (8 million shares), Iridian Asset Management (4 million shares)

Source: Goldman Sachs, Bloomberg

13. WPX Energy

Ticker: WPX

Sector: Oil & Gas Exploration & Production

% owned by hedge funds: 20%

2Q Return: 18%

YTD Return: 24%

Major Owners: Taconic Capital Advisors (12.8 million shares), Levin Capital Strategies (3.4 million shares), Encompass Capital Advisors (3.3 million shares)

Source: Goldman Sachs, Bloomberg

12. LyondellBasell Industries NV

Ticker: LYB

Sector: Commodity Chemicals

% owned by hedge funds: 20%

2Q Return: 5%

YTD Return: 21%

Major Owners: Viking Global Investors (10.5 million shares), Discovery Capital Management (4.5 million shares), DE Shaw & Company (3.5 million shares)

Source: Goldman Sachs, Bloomberg

11. Tripadvisor

Ticker: TRIP

Sector: Internet Retail

% owned by hedge funds: 20%

2Q Return: 16%

YTD Return: 68%

Major Owners: Pennant Capital Management (3.4 million shares), Coatue Management (3.3 million shares), Par Capital Management (3.1 million shares)

Source: Goldman Sachs, Bloomberg

10. Netflix

Ticker: NFLX

Sector: Internet Retail

% owned by hedge funds: 21%

2Q Return: 12%

YTD Return: 174%

Major Owners: Icahn Associates (5.5 million shares), Coatue Management (1 million shares), Arrowstreet Cap (950,000 shares)

Source: Goldman Sachs, Bloomberg

9. Goodyear

Ticker: GT

Sector: Tires & Rubber

% owned by hedge funds: 22%

2Q Return: 21%

YTD Return: 36%

Major Owners: Appaloosa Management (22 million shares), SAC Capital Advisors (9.3 million shares), Lombard Odier Asset Management (2.4 million shares)

Source: Goldman Sachs, Bloomberg

8. CBRE Group

Ticker: CBG

Sector: Real Estate Services

% owned by hedge funds: 23%

2Q Return: -7%

YTD Return: 11%

Major Owners: ValueAct Holdings (32 million shares), Blum Capital Partners (15 million shares), Select Equity Group (6.3 million shares)

Source: Goldman Sachs, Bloomberg

7. Tenet Healthcare

Ticker: THC

Sector: Health Care Facilities

% owned by hedge funds: 24%

2Q Return: -3%

YTD Return: 24%

Major Owners: Glenview Capital Management (9.8 million shares), Samlyn Capital (2.1 million shares), Blue Ridge Capital (2.1 million shares)

Source: Goldman Sachs, Bloomberg

6. Family Dollar Stores

Ticker: FDO

Sector: General Merchandise Stores

% owned by hedge funds: 24%

2Q Return: 6%

YTD Return: 13%

Major Owners: Trian Fund Management (8.3 million shares), Paulson & Co (7.4 million shares), Highfields Capital Management (3.1 million shares)

Source: Goldman Sachs, Bloomberg

3. H&R Block

Ticker: HRB

Sector: Specialised Consumer Services

% owned by hedge funds: 26%

2Q Return: -5%

YTD Return: 62%

Major Owners: Viking Global Investors (30 million shares), Lone Pine Capital (7.6 million shares), Hoplite Capital Management (7 million shares)

Source: Goldman Sachs, Bloomberg

2. Constellation Brands

Ticker: STZ

Sector: Distillers & Vintners

% owned by hedge funds: 30%

2Q Return: 9%

YTD Return: 51%

Major Owners: Kensico Capital Management (7.1 million shares), Senator Investment Group (4.1 million shares), Corvex Management (4 million shares)

Source: Goldman Sachs, Bloomberg

1. J.C. Penney

Ticker: JCP

Sector: Department Stores

% owned by hedge funds: 36%

2Q Return: 13%

YTD Return: -30%

Major Owners: Pershing Square (39 million shares), Soros Fund Management (19 million shares), Perry Corp (16 million shares)

Source: Goldman Sachs, Bloomberg

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