Hedge funds have been buying these names.
Once every quarter, investors get a glimpse behind the curtains of some of the largest and most successful hedge funds. The U.S. Securities and Exchange Commission requires any funds with at least $100 million in assets under management to publicly disclose all stocks they bought or sold each quarter on Form 13F. The latest round of 13F filings was released, and it was particularly insightful for investors because of the extreme volatility in the first quarter and the uncertain near-term economic outlook. Here are the seven top hedge fund stocks of the first quarter, according to data aggregator WhaleWisdom.
JD.com (ticker: JD)
The hottest hedge fund stock in the first quarter based on samplings of 100 different funds is Chinese e-commerce giant JD.com. About 2.1% of all hedge funds had JD as one of their top 10 holdings in the first quarter. In fact, 164 different funds owned shares of JD.com, and aggregate hedge fund holdings were up 9.7% in the first quarter. Forty funds created a new position in JD.com in the first three months of the year, while 48 other funds added to an existing position. JD stock is up 45% year to date.
Teladoc Health (TDOC)
Given the health crisis, it’s understandable why fund managers would be scooping up shares of phone and video medical consultation company Teladoc Health. The stock is up 91% year to date — 109 hedge funds own it, or about 7.6% of all funds that file 13Fs. Forty-two funds took new stakes in Teladoc in the first quarter, while 21 others added to existing positions. Chicago hedge fund Wolverine Asset Management was one of the most aggressive buyers, scooping up 8.5 million shares of Teladoc in the first quarter to bring its total investment to $194.2 million.
SiteOne Landscape Supply (SITE)
SiteOne Landscape Supply is another stock that had fund managers’ attention in the first quarter. Forty-eight funds held a total of 11.67 million shares of SiteOne at the end of the first quarter. Nine different funds established new positions in the stock, while 22 funds added to established positions. At one point during the downturn, SiteOne shares were down about 40% year to date, but fund managers that bought the dip have enjoyed roughly an 80% rally since late March. New York hedge fund Fred Alger Management was among the big buyers, adding 82,365 shares.
Acceleron Pharma (XLRN)
Acceleron Pharma shares skyrocketed more than 70% in January alone after the company reported positive midstage trial data on its pulmonary arterial hypertension drug candidate sotatercept. Whether they bought before or after the big news, 68 hedge funds owned 27.2 million shares of Acceleron stock by the end of the first quarter. Twenty-six funds created a new position in Acceleron in the first three months of the year, while 18 other funds added to existing positions. Avoro Capital Advisors was the biggest buyer, adding 860,000 shares.
Identity management software company Okta has bucked the trend in 2020, gaining about 55% year to date. More than 100 funds held 32.2 million shares of Okta at the end of the first quarter, up 2.3% from the end of 2019. Twenty-four funds established new positions in the stock, while 32 funds added to established positions. Many of these hedge fund investors, including Wolverine Asset Management and Calamos Advisors, likely see online identity management as a secular growth trend. And the work-from-home environment in 2020 has only highlighted the importance of Okta’s services.
Charter Communications (CHTR)
Charter Communications is one of the largest U.S. cable TV providers. Charter shares have performed relatively well so far in 2020, despite the headwinds cable TV faces from streaming services like Netflix (NFLX). Sixty-six hedge funds have Charter as one of their top 10 holdings. Hedge funds own 63.4 million shares, up 9.5% in the first quarter. Sixty funds created new positions in Charter in the first three months of the year, while 79 other funds added to existing positions. Citadel Advisors was the biggest buyer, adding 1.57 million shares.
Year after year, Amazon.com puts up impressive stock returns, so it’s not surprising that hedge funds have been buying in the first quarter. Amazon shares are up another 30% year to date, and 565 different hedge funds own the stock, about 39.5% of all funds that file 13Fs. Eighty-seven funds took new stakes in Amazon in the first quarter, while 257 others added to existing positions. New York hedge fund AllianceBernstein was one of the most aggressive buyers, adding 795,171 shares of Amazon in the first quarter to bring its total investment to $3.42 billion.
Hedge funds’ top stock picks:
— JD.com (JD)
— Teladoc Health (TDOC)
— SiteOne Landscape Supply (SITE)
— Acceleron Pharma (XLRN)
— Okta (OKTA)
— Charter Communications (CHTR)
— Amazon.com (AMZN)
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Update 05/28/20: This story was published previously and has been updated with new information.