In the first quarter, hedge funds showered new love on Exxon Mobil Corporation (NYSE:XOM), General Electric Company (NYSE:GE), Time Warner Inc (NYSE:TWX) and Hess Corp. (NYSE:HES), resulting in a decline in short interest as they entered Goldman Sachs’ VIP Basket of 50 stocks. The VIP list includes the favorite stock picks from hedge funds in each quarter. We have covered the major points from GS Hedge Fund Trend Monitor, which found that American International Group Inc (NYSE:AIG) had maintained its hold as top hedge fund holding.
Hedge funds: Short Favorites In Small-Mid Cap Stocks
A major increase in short interest was witnessed in Fusion-IO, Inc. (NYSE:FIO), up to 30 percent of market cap in Q1 from 22 percent in Q4 2012. VIVUS, Inc. (NASDAQ:VVUS) got more attention from shortsellers, interest rose from 21 percent to 26 percent of market cap.
Q1 saw a major decrease in short interest in SuperValu INC. (NYSE:SVU), down to 26 percent of market cap in 1Q2013 from 40 percent in 4Q2012. Short interest also fell in J.C. Penney Company, Inc. (NYSE:JCP), down to 26 percent of market cap in 1Q2013 from 29 percent in 4Q2012. Pitney Bowes Inc. (NYSE:PBI), now 28 percent from 31 percent in Q4.
Short interest in Research In Motion Ltd (NASDAQ:BBRY) rose to 30 percent from 26 percent, Herbalife Ltd. (NYSE:HLF) fell from 35 percent to 31 percent in Q1.
Large Cap Stocks With Renewed Interest
We have discussed the activity in Hess Corp. (NYSE:HES) in a previous post, data from Goldman Sachs also shows that Hess Corp. (NYSE:HES) made the largest leap of all by coming in at No.16 in VIP list and landing in the top ten holdings of 22 hedge funds.
The new buyers of GE, XOM and TWX are also worth looking into. Time Warner Inc (NYSE:TWX) is held in the top ten holdings of 15 hedge funds and an additional 27 funds are owning significant positions in the media company, the stock is ranked at No.41 in the VIP list. New buyers of TWX include Moore Capital, Marshall Wace and JAT Capital. Whereas Viking Global, Coatue Management, Blue Ridge, Discovery Capital boosted their stakes.
General Electric Company (NYSE:GE) comes in at No. 44, with 14 hedge funds owning it in their top 10. Adage Capital, Balyasny Asset Management, D.E Shaw, Columbus Circle, Bridgewater Associates and AQR Capital boosted their stakes while Odey Asset Management bought a new position in the conglomerate.
As of March 31, Exxon Mobil Corporation (NYSE:XOM) is owned by 14 funds in top ten holdings and an additional 22 have a considerable stake. Of the 50 stocks that landed into VIP basket, Exxon enters at No.49. D.E Shaw, Two Sigma, and Yacktman boosted their stakes.
Stocks that saw lower investor interest in Q1 and exited the VIP list, thus falling into Short Position Basket, were Johnson & Johnson (NYSE:JNJ), Oracle Corporation (NASDAQ:ORCL), Cisco Systems, Inc. (NASDAQ:CSCO) and Wells Fargo & Co (NYSE:WFC). Note that these positions in the short basket are not the most shorted equities, they are large cap stocks from S&P 500 that have the highest total dollar value of short interest outstanding.