The latest 13F regulatory filings that disclose the buying and selling of stocks among hedge funds have recently been released. As is always the case, the filings reveal some interesting moves among the world’s best investors. They also show patterns and trends forming when it comes to where the “smart money” is allocating capital. Often ahead of the broader market and retail investors, it can be instructive to study the moves of hedge fund managers to get a sense of both sentiment and where they see the market headed in the near-term. Similar to earnings reports, backdated a quarter, 13F filings provide a snapshot of the recent past. They still provide insight into how the “Masters of the Universe” see the stock market and structure their bets. Here are three loved hedge fund stocks that are being bought in bulk.
Amazon (AMZN)
In a recent note to clients, investment bank Goldman Sachs (NYSE:GS) highlighted the fact that hedge funds have become net sellers of the so called “Magnificent Seven” technology stocks. After increasing their positions throughout 2023, top hedge funds in America have begun unwinding their positions in popular mega-cap technology companies. Despite continuing to outperform the market, hedge funds have begun selling the high-flying tech stocks. The selling led Goldman Sachs to place Microsoft (NASDAQ:MSFT) on its “Falling Stars” list of stocks that have seen the largest drop in popularity among hedge funds.
However, there is one Magnificent Seven stock that continues to be added to hedge fund portfolios: Amazon (NASDAQ:AMZN). Top hedge funds continue to be net buyers of the e-commerce company’s stock, notes Goldman. The continued buying of AMZN stock comes after the company reported its best quarterly earnings print in two years. Additionally, the company’s shares are about to be added to the Dow Jones Industrial Average. While AMZN stock has gained 82% in the last 12 months, its growth has trailed other mega-cap tech stocks whose share prices have doubled and even tripled.
Liberty Global (LBTYA, LBTYB, LBTYK)
Liberty Global (NASDAQ:LBTYA, NASDAQ:LBTYB, NASDAQ:LBTYK), despite getting little attention in the financial press, is a British telecommunications firm that hedge fund managers are loving. The latest 13-F regulatory filings with the U.S. Securities and Exchange Commission show that hedge fund managers Anthony Bozza (Lakewood Capital), Seth Klarman (Baupost) and Larry Robbins (Glenview) each initiated new positions in the company’s stock during the fourth quarter of 2023. It’s not clear what the hedge fund titans see in Liberty Global, given that the stock is down 13% over the past 12 months and has declined 24% in the last five years.
The company, based in London, England, has operations around the world and is currently undergoing a major restructuring, focusing on shareholder returns. Liberty Global intends to buyback up to 10% of its own shares this year and distribute $1.7 billion in dividends. Also, the company is in the process of spinning off its Swiss telecom unit, Sunrise. Hedge fund managers are betting that the restructuring, spinoff, and shareholder returns will boost Liberty Global stock moving forward.
Alibaba (BABA)
Both Goldman Sachs and Bank of America (NYSE:BAC) have noted in separate reports that hedge funds are now buying Chinese stocks at the fastest pace since 2015. As the government and regulators in China take steps to boost the country’s ailing economy and stock market, hedge funds are piling back into the nation of 1.4 billion people. And one of the stocks hedge funds are loading up on is Chinese e-commerce giant Alibaba (NYSE:BABA). One prominent hedge fund manager who added to his position in BABA stock in Q4 of last year was Michael Burry of Scion Asset Management.
Capital flowing into Alibaba comes as the “Amazon of China” continues to struggle. In the last year, BABA stock is down nearly 20%, bringing its five-year decline to 60%. However, if Chinese equities market rebound strongly, Alibaba’s share price will likely recover too. Signs are encouraging in this regard, with Chinese markets having risen for nine consecutive trading days. Beijing’s ongoing stimulus measures could reignite China’s stock market similarly to Japan’s main bourse rebounding to hit an all-time high.
On the date of publication, Joel Baglole held a long position in MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
