Note: we will have a lot more on this topic in the coming days so stay tuned!

S&P Capital IQ, a leading provider of multi-asset class research data and insights, has announced the release of its review of 2014 Q3 13F filings by pure play hedge funds.  The quarterly S&P Capital IQ Hedge Fund Tracker is the only aggregate analysis of hedge fund stock ownership of its kind to spotlight hedge fund trend-investments in specific stocks and sectors.   It finds that energy and healthcare stocks saw the largest growth in new hedge fund buying activity during Q4 2014, with AbbVie, Actavis and Alibaba as the most popular individual stocks.  A copy of S&P Capital IQ’s Q4 Hedge Fund Tracker Report can be found here.

Chart via S&P CapitalIQ Hedge Funds
Chart via S&P CapitalIQ

“Hedge funds are among the most sophisticated institutional investors in the world.  By analyzing their behavior in this manner, we’re able to provide valuable insight for investors who want to know where the ‘smart money’ is investing,” said Pavle Sabic, Financial Risk Manager, S&P Capital IQ. “SEC filings offer a valuable source of market intelligence for investors if they can quickly access aggregate trend data based on that information.”

Following is a summary of significant findings in the Q3 Hedge Fund Tracker:

  • Top Funds: Citadel and Millennium were the top two hedge funds in terms of total equity holdings, followed by Renaissance Technologies which beat Icahn Capital to 3rd spot this quarter. Over the course of Q3, Icahn only added 1 new position with 25 stocks held in total.
  • Apple and Baidu Lose Favor with Hedge Funds:  The top three most-sold stocks among hedge funds in Q3 were Apple, Baidu and Time Warner.  Funds in the analysis decreased their positions in Baidu by $921 million while Apple saw its ownership among funds in the study drop by $1.3 billion in Q3.  Despite this sell-off, Apple remains one of the largest individual stock holdings among the top hedge funds.
  • Energy & Healthcare Top Sector Buys; Info Tech Drops: The Energy sector saw $4.4 billion in buying by top hedge funds this quarter, followed by Healthcare, which saw $3.4 billion in new investment among hedge funds.  After leading all sectors in Q2, the Information Technology sector saw a $497 million sell-off in Q3.
  • AbbVie, Actavis and Alibaba are Top Buys: AbbVie and Activis saw sharp increases in buying among hedge funds, with 1.9 billion and $1.5 billion in new investment, respectively.  Unsurprisingly, five hedge funds took brand new positions in Alibaba at $1.4 billion in total. Following its September IPO, Alibaba landed in 19th position out of the top 100 positions for these 10 hedge funds.
  • Mohawk Industries is Fastest Riser: Jumping from 78th to 17th position among top hedge funds’ 100 largest holdings, Mohawk saw $994 million in buys this quarter compared to last. The company designs, manufactures, sources, distributes, and markets floor covering products for residential and commercial applications in both remodeling and new construction worldwide.
  • Thermo Fisher Further Decrease:  Thermo Fisher, once at the top of the buys, has dropped another $392 million with 2 hedge funds decreasing their positions.