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The latest 13F filings, which tell us what hedge fund managers were doing in the previous quarter, reveal several Money Morning picks among the most popular stocks.
In some cases, Money Morning listed these picks as stocks to watch well before the fund managers jumped in. And once you own a stock, it's always great to see the big money pile in behind you to help feed gains.
The buying and selling habits of hedge fund managers have a place on every investor's radar.
The reason? Hedge fund managers usually have access to more information about the companies they buy. Plus, they have the clout to move stock prices.
And then there's the impact of activist investors, who agitate for such moves as break-ups, mergers, or stock buybacks. When one of them targets a stock, the price typically rises.
Given the outsized influence of hedge fund managers, we're always pleased when they agree with us, especially after the fact.
Here's a look at some of the positive hedge fund trends from the third quarter that mirrored several of Money Morning's long-standing stocks to watch:
Hedge Funds Scoop Up Our Stocks to Watch
One key category is stocks that drew the most buying in the quarter. Much of this is new interest in a stock. It gives us the best insight into which stocks fund managers see as winners in the months ahead.
The top stock here was Alibaba Group Holding Ltd. (NYSE: BABA) stock. According to hedge fund tracking site Whalewisdom.com, 12.9% of the funds it follows bought Alibaba stock in the third quarter. No doubt hedge fund buying played a part in the 38% first-day surge of BABA stock. As of today (Monday), Alibaba shares are up 65% from their IPO price.
Money Morning has been bullish on Alibaba since late 2013, long before the IPO. And we still are. I love Alibaba and I love what they stand for," Money Morning Chief Investment Strategist Keith Fitz-Gerald said earlier this month. "I've recommended Alibaba stock for a long time. I think the stock has a long way to go from here, and the company is going to rewrite the Internet."