10 Most Popular Tech Stocks Among Hedge Funds
Meena is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The technology sector gets a good deal of attention from the media; many of the top companies are household names and Americans use some of their products every day. We have gone through our database of 13F filings from hedge funds and other major investors for the second quarter of 2012, picked out technology stocks, and ranked them according to how many hedge funds reported owning the stock. The first few were easy: Apple, Google, and Microsoft actually led our list of the ten most popular stocks among hedge funds. Read on to see the full list of hedge funds’ favorite tech stocks as of the end of June or see the top ten list for the first quarter.
Apple (NASDAQ: AAPL). 140 hedge funds owned Apple at the end of the second quarter, even with the figure from the first quarter. Despite its massive size, Apple’s smartphones and tablets are still powering it to strong growth. Last quarter revenue and earnings both increased by over 20% compared to the same period in 2011. The trailing P/E is 16, so Apple is easily a growth-at-a-reasonable-price stock if it can fend off increasing competition. D.E. Shaw owned over $1 billion worth of Apple at the end of June.
Google (NASDAQ: GOOG). A few hedge funds sold out of Google during the quarter, dropping the number of funds with positions in the stock from 120 to 114. Billionaire Stephen Mandel’s Lone Pine Capital was a major holder of the stock; Mandel, a Tiger Cub, and his team manages over $17 billion at Lone Pine (see more stock picks from Lone Pine Capital). Google trades at 21 times trailing earnings but it is holding a lot of cash and it is growing at decent rates.
Microsoft (NASDAQ: MSFT). 98 hedge funds owned Microsoft at the end of June, down from 111 at the beginning of April. Microsoft has announced its own tablet offering but it is unclear if the company will be able to balance its entrance into the market and favorable relations with hardware manufacturers. Billionaire Jim Simons’s Renaissance Technologies nearly doubled its Microsoft position during the second quarter (find more top picks from Renaissance Technologies).
Qualcomm (NASDAQ: QCOM). Qualcomm also saw some hedge funds leave during the quarter, falling from 86 hedge fund owners to 76. Qualcomm trades at 18 times trailing earnings and 15 times forward earnings estimates. Billionaire Julian Robertson bought more Qualcomm stock during the second quarter, and it is now one of his top five positions.
Oracle (NASDAQ: ORCL). 63 hedge funds owned Oracle at the end of March, and three months later the number had fallen to 57. Oracle trades at a trailing P/E of 16. Seth Klarman’s Baupost Group initiated a 15.8 million share position in the stock during the second quarter (research more of the Baupost Group's positions).
Yahoo! (YHOO). Hedge funds generally were not impressed with Yahoo, and a few sold out bringing hedge fund ownership down to 55 funds from 61 in the previous quarter. After activist investor Dan Loeb pushed out the company’s former CEO, Yahoo hired ex-Googler Marissa Mayer to turn the company around in July.
Cisco Systems (CSCO). Cisco saw the largest outflow of hedge fund interest out of the names on this list: 53 funds owned a stake in the company at the end of the second quarter down from 68. Billionaire Ken Fisher’s Fisher Asset Management added to its Cisco position between April and June.
EMC Corporation (EMC). 51 hedge funds owned EMC at the end of June, down from 58 at the beginning of the quarter. Bain Capital’s Brookside Capital increased its stake by 38% during the second quarter.
International Business Machines (IBM). IBM made it onto the top ten list for the second quarter, at the #9 slot. It dropped to 45 hedge funds owning the stock from 46, but other technology companies saw the quantity of positions decrease even more. Berkshire Hathaway is a major holder of IBM.
Hewlett-Packard (HPQ). Hewlett Packard was another new name on the list. 43 funds owned the stock at the end of the second quarter, compared to 49 at the end of the first quarter. Relational Investors was the top owner of HP among the funds in our database.
This article is written by Matt Doiron and edited by Meena Krishnamsetty. Meena has long positions in AAPL, GOOG, and MSFT.The Motley Fool owns shares of Apple, Google, Microsoft, Oracle, and Qualcomm. Motley Fool newsletter services recommend Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.