A high-confidence stock selection by hedge funds and prominent investors may prove ready to outperform the market in the new year.
What will drive the markets this week?
The financial sector has gained newfound favor in the hedge fund community following the election of former President Donald Trump. Professional traders increased their exposure to financial stocks to the highest level in 15 years, according to a Goldman Sachs analysis of 697 hedge funds managing $3 trillion in equities.
LPL Financial, a financial services company, stood out as the most concentrated long position in the sector, with 16% of its stock capitalization held by hedge funds at the end of the third quarter, according to Goldman Sachs data. Steven Mandel’s Lone Pine Capital raised its stake in LPL Financial during the last quarter, increasing its investment to over $500 million. Dan Loeb’s Third Point also recently added a new position worth $112 million in the stock.
Financial stocks surged significantly after election day, partly due to hopes that the new administration would roll back several government regulations. LPL Financial shares jumped 41% in the fourth quarter.
JD.com
Major investors have also turned their attention to Chinese stocks recently, with a quarter of hedge funds now holding at least one Chinese ADR, the highest since 2021, according to Goldman Sachs. This enthusiasm was fueled by signals from the Chinese government about broad stimulus measures aimed at reviving growth and avoiding prolonged stagnation.
In November, China announced a five-year economic stimulus package worth 10 trillion yuan to address local government debt issues, with further economic support expected next year. JD.com, a Chinese e-commerce giant, has become a favorite among high-profile investors. David Tepper of Appaloosa Management, who told CNBC he was buying “everything” related to China due to the latest government support, held JD.com as one of his main positions. Philippe Laffont of Coatue Management and Michael Burry, famous for predicting the 2008 financial crisis, also significantly increased their stakes in JD.com during the last quarter.
Domino’s
Warren Buffett’s Berkshire Hathaway invested in the national pizza chain Domino’s Pizza, whose stock traded near its lowest level of the year. The investment, worth around $500 million, is relatively small in Berkshire’s massive portfolio—its cash reserves alone exceed $300 billion—suggesting the investment might have been directed by Buffett’s deputies, Ted Weschler and Todd Combs.
The pizza chain aligns with the conglomerate’s other long-term investments in processed foods and fits Berkshire’s value-investing philosophy. Philippe Laffont’s Coatue also holds a significant stake in Domino’s.
Domino’s has faced challenges in comparable sales growth in the US as competition for price-sensitive customers intensifies. The company’s stock has risen less than 3% this year.
Nike
Bill Ackman’s Pershing Square significantly increased its stake in Nike during the last quarter, bringing the investment to $1.4 billion in his concentrated portfolio. At the end of June, the stake was valued at approximately $220 million.
Nike is undergoing a broader reorganization after changing its strategy to sell directly to consumers. Earlier this month, the company’s new CEO, Elliott Hill, outlined a strategy to return the online business to full-price models and aggressively liquidate old inventory through “less profitable channels.” Nike shares have significantly underperformed the market, falling more than 30% this year.
Constellation Energy
Energy producers were another group of stocks that gained popularity among stock-picking hedge funds, anticipating Trump’s return to the White House. Constellation Energy saw the largest increase in high-confidence holdings by hedge funds, including purchases by Coatue Management and Lone Pine Capital, according to InsiderScore data.
Energy companies could benefit from the president-elect’s promised rollback of environmental regulations and his support for the crypto industry and its massive energy demands. Constellation Energy shares have risen 94% this year.
Varchev Absolute Trader
борсова платформа
- Търгувай над 3000 финансови инструмента: Crypto, Форекс, Акции, Индекси, Суровини, ETF-и
- Използвай платформа с директно изпращане ордерите на борсите
- Best Trading Platform - "Online Personal Wealth Awards" EU награждава Varchev Absolute Trader
- Cloud base платформа - твоят трейдинг сетъп на всяко устройство
- Traders Talk - чуй какво движи пазарите в реално време
- Market Sentiment - търгувай с настроенията на инвестиционите банки
- Top movers - най-горещите трейдове във всеки един момент
- Stocks scanner - филтрирай най-подходящите за твоя трейдинг стил пазарни инструменти
- Heat map - Търгувай в посоката на големите играчи
Read more:
Login to comment
Comments:
Leave a comment