Big Hedge Funds Are Ramping Up These 5 Hot Stocks

Hedge fund’s Q3 trades are now public following the release of 13F forms filed with the SEC. This means that now is the time to track the “Smart Money” of hedge fund gurus like Warren Buffett and Carl Icahn. Here we searched for stocks with both a positive hedge fund signal and a ‘Strong Buy’ best analyst consensus:

Using our big data analytics, we can also track the stock’s overall outlook from the Street. This gives us a better idea of whether these stocks make compelling investment opportunities. Bearing that in mind, let’s now take a closer look at these 5 top stocks.

1. Apple (NASDAQ:AAPL)

Hedge funds continue to boost holdings in tech giant Apple. The world’s most famous fund manager, Warren Buffett, now has a huge AAPL position of over $20 billion. In Q3, he increased Berkshire’s AAPL holding for the fifth time since coming late to the stock in 2016. Three other fund managers also have $1 billion + AAPL positions: Ken Fisher (Fisher Asset Management); Lisa M Jones (Pioneer Investment) and Philippe Laffont (Coatue Management).

“We were the first on Wall Street to project that Apple would reach a $1 trillion market cap as reflected by a price target; our current price target of $235.00 equates to approximately a $1.2 trillion market cap” says top Drexel Hamilton analyst Brian White. His bullish $235 price target is AAPL’s highest yet and projects a 38% rise in the next 12 months.

You can click on the screenshot for further insights into which hedge funds are buying AAPL right now.

2. Applied Materials (NASDAQ:AMAT)

Chip gear maker AMAT is ticking all the boxes right now. In Q3, hedge funds snapped up 5.9 million more Applied Materials shares. Zero hedge funds exited the stock and only 5 reduced positions vs 18 who increased holdings. UK-based fund manager Egerton’s John Armitage upped his position by 23% to $883 million- making this the fund’s third biggest stock after Comcast and Charter Communications.

“Every Year is a Peak Year for Gary’s [CEO Gary Dickerson] AMAT,” comments Credit Suisse’s Farhan Ahmad. He reiterated his buy rating on AMAT on November 17 with a $72 price target (27% upside potential) following the stock’s strong fiscal fourth quarter results and upbeat guidance.

Overall AMAT boasts 14 consecutive buy ratings from analysts in the last three months. And with a $64.50 average price target, analysts are predicting AMAT can climb 10% over the next 12 months.

3. Textron Inc (NYSE:TXT)

If you haven’t heard of Textron before, this is an aerospace-focused multi-industrial set to perform strongly in 2018. In the last quarter top fund manager Theofanis Kolokotrones (PRIMECAP) ramped up his TXT position by 22% to over $192 million. He is now the stock’s largest shareholder followed by Mario Gabelli (Gamco Investors).

Five-star Cowen & Co analyst Cai Rumohr has just assigned a buy rating to TXT with a $60 price target (13% upside potential). He says: “18-19% 2018-19 EPS gains seem realistic even without a strong lift in legacy bizjet demand; and TXT looks attractive at a below-avg. 9.9x 2018 TEV/EBITDA & a 44% net buy rating. Given investor skepticism re bizjet lift, we think it sets up well for ’18.” Textron has received four straight buy ratings from analysts in the last three months.

4. Broadcom (NASAQ:AVGO)

Hedge funds have a ‘very positive’ sentiment on semiconductor giant AVGO, with positions steadily rising for the last four quarters. The stock’s biggest investor is famous fund guru Steve Mandel of the $20 billion Lone Pine Capital fund. Mandel is worth tracking as he is ranked an impressive #24 out of 202 hedge funds tracked by TipRanks.

AVGO is currently trying to buy out rival chip maker Qualcomm (QCOM) in the largest tech deal ever-recorded. Analysts say the deal would create sizeable synergies for AVGO. Instinet’s Romit Shah writes that Broadcom has “a lot of leverage,” and that “an offer of $80 per share or higher would be perceived as highly compelling to Qualcomm’s largest shareholders.”

Overall, AVGO has one of the best ratings from the Street with 23 back-to-back buy ratings and an average analyst price target of $299. This translates into upside potential of close to 10%.

5. Norwegian Cruise Line (NASDAQ:NCLH)

This Bermudian cruise ship company is a favorite with hedge fund managers- who increased holdings by a whopping 2 million shares in the last quarter. New positions include $66m from Ken Heebner of Capital Growth Management, and $44m from Donald Chiboucis of Columbus Circle Investors.

Top Argus Research analyst John Staszak has just initiated coverage of NCLG with a $68 price target. He says the stock is attractively valued with a clean balance sheet, strong prospects for earnings growth, and an expanding fleet with NCLH allocating $1 billion for building new ships every year through 2020.

Overall, NCLH has received 5 buy ratings and 1 hold rating from analysts in last three months, with an average analyst price target of $65.80 (20% upside from the current share price).

 

Disclaimer: TipRanks is an independent cloud based service that measures and ranks digitally published financial advice. TipRanks' natural language processing (NLP) algorithms aggregate and ...

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