Hedge funds have been scooping up these stocks.
The U.S. Securities and Exchange Commission requires any hedge fund that manages at least $100 million in assets to disclose its holdings publicly via form 13F every quarter. Those 13F filings give investors a glimpse behind the curtain at which stocks the wealthiest and most successful investors in the world are buying and selling. The stock market has been extremely unpredictable in the past year, but 13F filings let investors see which stocks the whales of Wall Street like most in 2021. Here are the seven top hedge fund stocks as of the most recent filings, according to WalletHub.
Apple (ticker: AAPL)
Apple is off to a rough start to 2021, down more than 6% year to date after gaining more than 70% in 2020. But while some investors are taking profits on the big 2020 returns, Apple remains the top 2021 stock holding among hedge fund managers. Fund managers added to their Apple holdings in the fourth quarter. One of Apple’s biggest bulls is Wall Street legend and Berkshire Hathaway (BRK.A, BRK.B) CEO Warren Buffett. Berkshire holds nearly 908 million shares of Apple worth roughly $110 billion. Berkshire’s Apple stake is more than twice the size of any other holding.
Bank of America (BAC)
Rising interest rates may be bad news for the stock market overall, but they could be very good for banks. Higher interest rates boost banks’ net interest margins — the difference between the interest they pay on deposits and the interest they collect on loans. Bank of America was the second-largest holding among hedge fund managers coming into 2021, and fund managers were adding to their positions in the fourth quarter. Buffett has always been a fan of bank stocks, so it’s no surprise Bank of America is Berkshire’s second-largest holding. Buffett’s BAC stock stake is worth about $38 billion.
Microsoft Corp. (MSFT)
Microsoft also had a big year in 2020, gaining 39% on the year thanks to its booming business software and cloud services businesses. However, hedge fund managers see more upside for Microsoft in 2021 given they were adding to their net holdings in the fourth quarter. Billionaire Ken Fisher’s Fisher Asset Management fund is one of Microsoft’s largest stakeholders. Fisher has been a long-term Microsoft investor, and he added more than 1 million shares to his holdings in the fourth quarter of 2020. Fisher now owns 23.3 million shares of MSFT stock worth about $5.5 billion.
Cloud services and e-commerce giant Amazon was another top performer of 2020, gaining 70% on the year. Amazon remains the fourth-largest holding among hedge funds in 2021, but fund managers reduced their net holdings slightly in the fourth quarter. Amazon is the second-largest holding of David Tepper’s Appaloosa Management fund. Tepper began building his stake in Amazon back in the first quarter of 2019, and he was adding to his position heading into 2021. After buying 56,200 shares of AMZN stock in the fourth quarter, Tepper now holds 197,700 shares worth about $620 million.
The health crisis triggered a boom in online engagement which was great news for Alphabet’s YouTube video streaming service and online advertising business. Google’s parent company reported 12.7% revenue growth and 17.2% net income growth last year, and its stock gained 30.8% on the year. Alphabet remains a top hedge fund holding in 2021 as well. Fund managers are betting Alphabet’s long track record of innovation and growth will continue. Fisher was among the fund managers buying GOOGL stock in the fourth quarter and now holds 1.67 million shares of Alphabet worth about $3.5 billion.
American Express (AXP)
Credit card giant American Express struggled during the economic shutdown in 2020, and its stock finished the year down 3%. However, the stock is off to a hot start to 2021, gaining 18% year to date in anticipation of pent-up credit card spending on apparel, restaurant dining, travel and entertainment. Buffett first took a nearly 10% ownership stake in American Express way back in 1994, and the stock remains Berkshire’s third-largest holding. Buffett hasn’t been buying any AXP stock as of late, but his 18.8% stake in the company is now worth about $21 billion.
Facebook is yet another big tech stock that was perfectly positioned to benefit from the health crisis. Facebook and Instagram’s user bases grew significantly, and their engagement levels spiked during the pandemic as people around the world increasingly interacted with friends and family digitally. Billionaire hedge fund manager Chase Coleman III is one of Facebook’s largest investors. Even after selling more than 2.4 million shares of FB stock in the fourth quarter, Coleman’s Tiger Global fund still holds more than 6.3 million shares of Facebook worth about $1.8 billion.
Seven top hedge fund stocks of 2021:
— Apple (AAPL)
— Bank of America (BAC)
— Microsoft Corp. (MSFT)
— Amazon.com (AMZN)
— American Express (AXP)
— Facebook (FB)
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Update 03/24/21: This story was published at an earlier date and has been updated with new information.