Amid an overall bull market, many stocks that smart money investors were collectively bullish on surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. That’s why we weren’t surprised when hedge funds’ top 20 large-cap stock picks generated a return of 37.4% through the end of November and outperformed the broader market benchmark by 9.9 percentage points.This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Is First Solar, Inc. (NASDAQ:FSLR) a marvelous investment today? The best stock pickers are betting on the stock. The number of long hedge fund positions rose by 6 lately. Our calculations also showed that FSLR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). FSLR was in 30 hedge funds’ portfolios at the end of September. There were 24 hedge funds in our database with FSLR holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a multitude of tools stock market investors have at their disposal to value stocks. A couple of the best tools are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best investment managers can outperform their index-focused peers by a healthy margin (see the details here).