Hedge Fund `Puppies' and `Hotels': What the 13F Filings Tell Us

(Bloomberg) -- Another 13F season is in the books, and everyone wants to know which stocks are getting more attention from the hedge-fund community.

Lori Calvasina, head of U.S. equity strategy for Royal Bank of Canada, attempts to answer this in her quarterly examination for both large-cap and small-cap stocks. Here’s a recap of her analysis of the filings, which show position changes for the end of the first quarter.

READ: Hedge Fund Reports Show 4.4% of Assets in ETFs: 13F Roundup

Hedge Fund `Puppies' and `Hotels': What the 13F Filings Tell Us

Hedge Fund ‘Hot Dogs’

Calvasina defines "hot dogs" as the stocks that capture the most hedge-fund dollars or are "most commonly associated with hedge fund crowding." Not surprisingly, these are heavily dominated by names in the tech, media and internet sectors, which have had a good start to the second quarter after a rough March.

Topping the list of S&P 500 Index companies is Facebook Inc., with more than $19 billion owned by hedge funds, followed by Alphabet Inc., Microsoft Corp., Amazon.com Inc. and Time Warner Inc. Apple Inc. remained on the list, though it fell from the eighth to the 18th spot.

New to the list for the first quarter are Booking Holdings Inc., Electronic Arts Inc., MasterCard Inc. and UnitedHealth Group Inc. Those that fell off include Comcast Corp., Charter Communications Inc. and PayPal Holdings Inc.

Hedge Fund ‘Hotels’

The “hotels” group is for the stocks with the highest percentage of their market cap owned by hedge funds. Envision Healthcare Corp. tops the list with more than 28 percent followed by NRG Energy Inc., Iqvia Holdings Inc., Incyte Corp. and TransDigm Group Inc.

Additions from the S&P 500, stripped of any M&A stocks, are Autodesk Inc., Wynn Resorts Ltd., Take-Two Interactive Software Inc. and Qorvo Inc., while removals include Signet Jewelers Ltd., Universal Health Services Inc. and Expedia Group Inc. MGM Resorts International fell significantly in rank.

Hedge Fund ‘Puppies’ and ‘Motels’

Calvasina also screened for ownership among the small caps, which have been on a tear with the Russell 2000 Index hitting another record Thursday.

The so-called hedge fund puppies are heavily concentrated in consumer discretionary, health care and tech, while the "motels" are dominated by health-care names.

Atop the "puppies" list are Caesars Entertainment Corp., Peabody Energy Corp., Avis Budget Group Inc., Avexis Inc. and ViaSat Inc., while Tenet Healthcare Corp. moved up the list. Additions are New York Times Co., GrubHub Inc., Medicines Co., Mammoth Energy Services Inc. and Knight-Swift Transportation Holdings Inc.

On the "motels" side of things -- Russell 2000 components with the highest hedge-fund ownership relative to market cap -- the two top names aren’t health care (Green Brick Partners Inc. and Mammoth Energy Services Inc.), while the next four are (Genomic Health Inc., Zogenix Inc., Retrophin Inc., Wave Life Sciences Ltd.). New entrants to the list are PTC Therapeutics Inc., Pacira Pharmaceuticals Inc., Strongbridge Biopharma Plc, Iovance Biotherapeutics Inc. and Corium International Inc.

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