Most Popular Hedge Fund Stocks

Want to bet like hedge funds? This is where they are investing.

Most Popular Hedge Fund Stocks

What a difference a year makes. After a volatile 2020, the stock market has rebounded. In early 2021, retail investors bet big against hedge funds that were shorting GameStop, and some of those hedge funds lost hundreds of millions of dollars.

But what if you wanted to bet with the hedgies, or at least see where the smart money is?

WalletHub analyzed the filings of over 400 hedge funds to see which companies were being held and traded the most to find the most popular hedge fund stocks. Hedge funds are betting that these companies will line their pockets. Although they could be wrong. Just ask Warren Buffet.

25. Shopify

Ticker: SHOP

Type of business: E-commerce

Revenue: $2.93 billion

Bottom line: Shopify is a subscription-based software that allows businesses to sell items. It's a go-to store for small businesses, but some big brands use them as well, like Victoria Beckham and Kay Swiss.

Thanks to an increase in online sales activity during the pandemic, subscriptions to Shopify grew 41 percent in 2020, and the value of all goods sold across merchants using Shopify shot to $119.6 billion, a 96 percent year-over-year increase.

Note: The 25 companies on this list come from a study by WalletHub.

24. Charter Communications, Inc

Ticker: CHTR

Type of business: Telecommunications

Revenue: $48.1 billion

Bottom line: Charter is the second-biggest cable provider in the United States. With more people working from home than ever before — and needing high-speed internet — Charter's revenue increased and so did its stock.

The company's customer base has increased over the last year as did its small and medium-sized business segment.

23. Verizon Communications, Inc.

Verizon display at the Consumer Electronics Show in Las Vegas

Ticker: VZ

Type of business: Telecommunications

Revenue:$128.3 billion

Bottom line: Verizon's user base and earnings increased in 2020 during the pandemic. Verizon also was the biggest buy of the year from Warren Buffet. The oracle from Omaha placed a $9 billion bet on the telecommunications giant in Q4 2020.

Berkshire now owns 147 million shares of Verizon, which currently had a dividend yield of around 4.6 percent when he made his stake. Compared to letting the cash sit in Treasuries, that yield is much more attractive.

22. UnitedHealth Group, Inc.

Ticker: UNH

Type of business: Health care

Revenue: $257.1 billion

Bottom line: UnitedHealth Group was in the portfolios of 91 hedge funds by the end of 2020, with hedgies taking a bullish bet on the healthcare company.

They might be right. Revenue for UnitedHealth has been increasing since 2017, and annual revenue was up 7.5 percent from 2019.

21. Tesla, Inc.

Ticker: TSLA

Type of business: Electric cars and energy

Revenue: $31.536 billion

Bottom line: 2020 was Tesla's first profitable year, earning $721 million in 2020 compared to 2019's loss of $862 million. That's even more impressive considering the pandemic, which caused a 15.5 percent decrease of new vehicle sales across the auto industry.

Pollution credits helped push Tesla into a profitable fourth quarter, and Elon Musk became the richest person in the world in January thanks to Tesla's rising stock. But Jeff Bezos passed him in March.

That's the life of a billionaire.

20. U.S. Bancorp

Ticker: USB

Type of business: Banking

Revenue: $25.421 billion

Bottom line: As the parent company of U.S. Bank, Bancorp is the fifth-largest bank in the United States, holding some $545 billion in assets.

While Bancorp was a popular hedge fund stock, Bancorp's revenue declined by 7.63 percent. The stock plummeted at the beginning of the pandemic but has rebounded to pre-pandemic levels, indicating the hedges purchased this stock when it was at a five-year low in March 2020.

19. Netflix, Inc.

Ticker: NFLX

Type of business: Streaming media

Revenue: $24.99 billion

Bottom line: When you're stuck at home during a pandemic, what's one of the most common things to do? One very popular option was to turn on Netflix and try to drown out the outside world.

Netflix added 26 million paid accounts in the first two quarters of 2020 and finished the year with 37 million new subscriptions, breaking its previous record of 28.6 million new subscribers in 2018.

Buying Netflix stock seemed like a no-brainer in 2020.

18. Comcast Corp

Ticker: CMCSA

Type of business: Telecommunications

Revenue: $103.56 billion

Bottom line: Nelson Peltz's Trian Partners increased its stake in Comcast to $900 million in 2020.

According to The Wall Street Journal, "It isn’t clear what exactly Trian is focused on beyond a belief that Comcast shares are undervalued. Trian is known for encouraging changes at companies it targets, such as a breakup or sale of underperforming divisions or moves to improve efficiency and better use capital."

Comcast saw a decline of nearly 5 percent year-over-year in 2020, but Trian is banking on them.

17. Capital One Financial Corp

Ticker: COF

Type of business: Banking

Revenue: $31.64 billion

Bottom line: Capital One is the 10th-largest bank in the United States, with about $364 billion in assets under management.

During the pandemic, its stock reached lows that hadn't been seen since 2011, but the company's stock reached all-time highs in early 2021, even though its profits in 2020 were $2.7 billion, down from $5.5 billion the previous year.

16. Baker Hughes Co.

Ticker: BKR

Type of business: Oil and gas

Revenue: $20.7 billion

Bottom line: Baker Hughes is one of the largest oil field service companies in the world.

The pandemic put a damper on gas and oil prices, but revenue for Baker Hughes exceeded expectations.

The company is betting on oil and gas prices to recover as vaccines roll out and the world gets back to normal.

15.Adobe Systems, Inc.

Ticker: ADBE

Type of business: Computer software

Revenue: $12.87 billion

Bottom line: Adobe's revenue has been significantly increasing year-over-year since 2017. In November 2020, the software giant announced a year-over-year revenue increase of 15.2 percent.

The company's stock has increased by 43 percent since 2019, which is exceptional, and no wonder why hedges had Adobe in their portfolio.

The pandemic didn't slow the company down, either.

14. Mastercard, Inc.

Ticker: MA

Type of business: Financial services

Revenue: $15.3 billion

Bottom line: Mastercard is one of the leading global payments processors and is poised to be one of the biggest winners in a world where all sorts of digital payments are becoming commonplace.

Warren Buffet owns some 4.7 million shares in Mastercard while S&P Global Market Intelligence projects a 23 percent annual revenue growth over the next three to five years.

13. The Kraft Heinz Company

Ticker: KHC

Type of business: Food and beverage

Revenue: $26.19 billion

Bottom line: Warren Buffet made a huge stake in Kraft Heinz, buying some 325 million shares in 2015 and financed the Kraft-Heinz merger. In 2019, Berkshire Hathaway took a $3 billion write-down for its investment.

"I was wrong in a couple of ways about Kraft Heinz," Buffet told CNBC in 2019. "We overpaid for Kraft."

The stock price of Kraft Heinz dropped by 50 percent over the last five years, although some hedge funds are taking a bearish bet on the company.

12. NVIDIA Corp.

Ticker: NVDA

Type of business: Technology and computer hardware

Revenue: $16.68 billion

Bottom line: NVIDIA had an incredible 2020, with a 53 percent increase in year-over-year revenue.

Demand for personal computing greatly increased during the pandemic, which was a huge boon for NVIDIA. Its gaming division saw a 67 percent year-over-year increase in revenue in the fourth quarter.

The company released a new series of graphics cards in 2020 and cannot keep them in stock fast enough, as the cards sell out almost immediately (and thanks in large part to scalpers). People are paying out the nose for graphics cards on the secondary market.

NVIDIA was billionaire Jim Simons' biggest buy of 2020.

11. Wells Fargo & Company

Ticker: WFC

Type of business: Financial services

Revenue: $80.3 billion

Bottom line: Despite being the most hated bank in America, Wells Fargo continues to be a highly traded stock among hedge funds.

Wells Fargo, which had to pay $3 billion for its fake account scandal, still has a black eye but isn't scaring off some investors.

Its biggest institutional holders are Vanguard, BlackRock and State Street.

10. PayPal Holdings, Inc.

Ticker: PYPL

Type of business: Financial services

Revenue: $21.45 billion

Bottom Line: PayPal's user base added 16 million accounts in Q4 of 2020, and its earnings surged as well.

The company believes this success will continue in the future as it forecasts businesses to continue trending toward a digital payment landscape.

9. Visa, Inc.

Ticker: V

Type of business: Financial services

Revenue: $24.48 billion

Bottom Line: Excluding China, Visa is the biggest banking card company in the world and holds a 60 percent share of the credit and debit cards market.

It's a financial behemoth, and its stock has been climbing since its $44 IPO in 2008.

8. The Coca-Cola Company

Ticker: KO

Type of business: Beverage

Revenue: $33 billion

Bottom line: Coca-Cola has made strides to bring its line of sugary beverages into a more health-conscious world. One way of doing that? Sell water.

The company now has eight different brands of bottled water and has been shedding over 600 unproductive products and has changed its pack and serving sizes.

Coca-Cola is Berkshire Hathaway's third-largest holding.

7. Facebook, Inc.

Ticker: FB

Type of business: Information technology

Revenue: $85.97 billion

Bottom line: Love it or hate it, Facebook is a major player in the tech industry. Its reach extends far beyond connecting friends and family. The social media giant owns Instagram, WhatsApp and Oculus VR, among others.

Facebook.com is a machine for spreading information — right or wrong — and the company saw record profits during the pandemic.

Its revenue increased by 21.6 percent in 2020.

6. American Express Company

Ticker: AXP

Type of business: Financial services

Revenue: $38.19 billion

Bottom line: American Express' revenue dropped by nearly 19 percent in 2020, and its stock hit a low of $69 in March 2020.

Consumer spending slowed, which hurt the credit card giant's bottom line, but investors see American Express making a comeback in 2021 as travel bans are lifted and consumer behavior returns to normalcy.

American Express was Berkshire Hathaway's sixth-largest holding.

5. Alphabet, Inc.

Ticker: GOOG

Type of business: Information technology

Revenue:$182.53 billion

Bottom line: Alphabet's profits soared during 2020, thanks in part to increased users watching YouTube, more people and businesses using the cloud, and generally more people just being online, even though many companies had to restrict their ad-spending budget in the midst of the pandemic.

YouTube alone pulled in more than $5 billion in revenue in Q3, a new high-water mark, while Google Cloud revenue hit $3 billion. Overall, Google's parent company pulled in over $182 billion in revenue in 2020, a year-over-year increase of 23.49 percent.

4. Amazon.com, Inc.

Ticker: AMZN

Type of business: E-commerce and information technology

Revenue:$386.1 billion

Bottom line: Amazon made out like gangbusters during the pandemic. With people stuck at home, online purchases surged, but even before that, Amazon was set to have a successful year. A month before the pandemic surged and people sheltered indoors, Amazon became a trillion-dollar company.

There is no sign that Amazon is slowing down. Some analysts believe that the company could hit a $4,000-per-share price and reach a $2-trillion valuation by 2023.

3. Microsoft Corp.

Ticker: MSFT

Type of business: Technology

Revenue: $153.3 billion

Bottom line: Increased use of cloud computing helped Microsoft exceed Wall Street expectations by several billion dollars. So too, did an increase of users in its gaming subscription services and an increase in revenue from LinkedIn.

Like all of the "big five" tech companies, the pandemic accelerated the speed at which businesses adopted more digital tech, and they profited from it.

Vanguard, BlackRock and State Street are Microsoft's three largest institutional holders.

2. Bank of America Corp.

Ticker: BAC

Type of business: Bank

Revenue: $93.75 billion

Bottom line: Bank of America's revenue declined by nearly 21.5 percent in 2020 due to the pandemic and falling interest rates.

But Buffet thinks Bank of America is going to be on the rise. Berkshire Hathaway owns a 12 percent stake in the banking giant. With a stake of over one billion shares, Bank of America is Berkshire Hathaway's top holding.

Why? Motley Fool theorizes Buffet likes the CEO, who seems to be steering the financial giant to a more diversified financial future. It also pays a 2.3 percent dividend yield and has become more efficient and technology-focused.

1. Apple, Inc.

Ticker: AAPL

Type of business: Technology

Revenue: $294.14 billion

Bottom line: Sales of Mac computers reached a new record of $9 billion during the pandemic, which caused a surge in electronic purchases for at-home work. Apple's smartwatches and iPads also grew, and while iPhone sales were slow because of a delayed iPhone 12 launch, Apple announced its most profitable quarter ever in December 2020.

Apple is Berkshire Hathaway's second-largest holding and also its largest sell, offloading 9.81 million shares for a lump sum of almost $1.1 billion. That was likely done so the investment company can buy more stock elsewhere.

Should you buy any of these stocks? Do your due diligence first. Just because a hedge fund believes in a stock doesn't mean it's for the little guy. Hedgies have billions of dollars and several lifelines to bail them out if things go wrong. The little guy doesn't.