Goldman Sachs: Apple’s a Darling, Amazon’s a Risk
There were no surprises as Apple (NASDAQ:AAPL) topped Goldman Sachs’ first quarter VIP List, a report that lists the 50 stocks that most often appear among the top ten holdings of hedge funds and other institutional investors. However, somewhat surprisingly, Amazon (NASDAQ:AMZN) appeared toward the top of a new list of very important short positions, with the former market love clearly out of favor already.
In an interview with CNBC, Goldman equity strategist David Kostin said the firm analyzed the “ownership of 7,000 different stock positions going back over the last 10 years looking at this every 90 days” and Apple appeared among the top 10 positions of “many, many, many funds.” According to Goldman calculations, Apple was listed by 106 out of all analyzed funds as a top-10 holding, making it the most important current stock to hedge funds.
Apple shares reached their peak of $644 on April 11, and then proceeded to go into a free-fall over the next few days as fears started mounting about the company missing earnings expectations for the quarter. However, the California company managed to beat forecasts, and though the stock has not gained back similar heights yet, bets that several new products may be launched in the coming few months are keeping it in the healthy $550’s.
Kostin reaffirmed the point that consumer discretionary and technology sectors offered the best stock-picking opportunities. Google (NASDAQ:GOOG), with a mention in 73 funds, and Express Scripts (NASDAQ:ESRX), with its 56 appearances, rounded out the top-three. Technology stocks dominate the top rungs, with Microsoft (NASDAQ:MSFT) and Qualcomm (NASDAQ:QCOM) appearing at the fourth and fifth positions, respectively.
Citigroup (NYSE:C), General Motors (NYSE:GM), Priceline.com (NASDAQ:PCLN), JPMorgan Chase (NYSE:JPM), and Liberty Media (NASDAQ:LMCA) make up the rest of the top-ten, in that order. Firms seem to have stuck with JP Morgan despite the investment banks’ stock falling over 25 percent since the end of March after the bank revealed billion-dollar losses at its chief investment office earlier this month. However, the bank’s ranking did drop from No.4 to No. 9.
Ford was a newcomer on the favorites list, at No. 20, having recently earned an ratings upgrade from Moody’s Investors Services this week.
This year until May 15, the Goldman’s VIP list of long positions gained 7.3 percent versus 6.7 percent for the S&P500 Index.
However, hedge funds seemed to have turned against Johnson & Johnson (NYSE:JNJ), with the company appearing on top of the short positions list. The shares of healthcare company Johnson & Johnson have slipped 3.14 percent through mid-May from January 1. Exxon Mobil (NYSE:XOM), Intel (NASDAQ:INTC), IBM (NYSE:IBM), and Amazon rounded out the top five companies that represent the largest short positions in the $2 trillion hedge fund industry.
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