Leading Hedge Funds' Best Ideas and Consensus Picks

Looks like another great quarter for the hedge fund tracking strategies. My previous observation that the funds exhibit similar downside volatility and much higher upside volatility looks like the right takeaway from this quarter. Historical testing showed a FOF approach outperforms by about 6-12% a year, and out-of-sample results in 2007 (roughly 10% outperformance) and 2008 (roughly 5% YTD) is a good indication that the model is working.

I sat down with Mark Yusko from Morgan Creek the other week, and he commented that the top holding for many of these funds on their 13F is likely not their best idea, but rather was their best idea and has simply appreciated the most. I reserve judgment until I see most of the data from lots of funds, which is why alphaCLONE is going to be such a cool software app (I'm starting to get really excited, the behind the curtains look so far is awesome). Sign up to keep abreast of the launch, targeted for this Summer.

On to the 13fs!

Bespoke takes a look at the hedge fund sector bets here. Taking the top three sectors from each manager below, I find the top sectors are Services 39%, Tech 37%, and Financial at 14%.

Hedge Fund Consensus - Top holdings owned by 15 value hedge funds, ranked by number of funds with the same position. Mastercard (MA) was the standout performer, and America Movil (AMX) was the only laggard. Everyone still loves Qualcomm (QCOM).

Apple (AAPL) (3)
AMX (4)
American Express (AXP) (3)
Covidien (COV) (3)
EMC (EMC) (3)
Google (GOOG) (3)
Microsoft (MSFT) (3)
QCOM (5)
Wal-Mart (WMT) (3)

The list of double repeats is at the end of the post.

Hedge Fund Best Ideas - Top two holdings from each of 10 value hedge funds listed below. Mastercard and Southwestern Energy (SWN) were the standout performers, and America Movil was the worst.

AAPL
American Tower (AMT)
AMX
AXP
CA (CA)
Cadence Design Systems (CDNS)
CSX (CSX)
GOOG
Hewlett-Packard (HPQ)
Coca-Cola (KO)
McGraw-Hill Companies (MHP)
MSFT
News Corp. (NWS)
Oracle (ORCL)
QCOM
Research In Motion (RIMM)
Ross Stores (ROST)
Target (TGT)
Wells Fargo (WFC)
WellPoint (WLP)

Click for individual portfolios:

Baupost Group

Blue Ridge Capital

Warren Buffett

Eminence Capital

Greenlight Capital

Lone Pine Capital

Maverick Capital

Okumus Capital

Private Capital

Tiger Global

List of double repeats:

Berkshire Hathaway (BRK.A)
CA
Cisco (CSCO)
Commscope (CTV)
Discover Financial Services (DFS)
Eaton (ETN)
Infosys Technologies (INFY)
MA
MDC (MDC)
MHP
Office Depot (ODP)
ORCL
Priceline.com (PCLN)
SAIC (SAI)
SBA Communications (SBAC)
TGT
Thermo Fisher Scientific (TMO)
Trane (TT)
Textron (TXT)
United Technologies (UTX)
WLP

Comments

[Richard Schweitzer]

Brick Income Fund A is
BRKQF

[M. Weinstein, SA Editor]

Thanks for the correction, Richard. I believe it referred to Berkshire, actually - BRK.A or BRK.B. Post updated accordingly.

[Chungst]

"[Mark Yusko states] the top holding for many of these funds on their 13F is likely not their best idea, but rather was their best idea and has simply appreciated the most."

That makes sense due to time lag of the filing coupled with the fact that cream (over time) rises to the top -- the biggest exposures ought to be the ones that has "legs" to run (Mastercard is a good example). In contrast, gunslingers are typically the types that place huge bets at the outset as opposed to building up a position over time.

Cheers

[keemia]

What's the idea behind getting into CDNS? Valuation, technicals, both, other?