This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Hedge Funds Hate These 5 Stocks -- but Should You?

Stocks in this article: AAPLMSFTWFCABCGE

Microsoft

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Another tech giant that's getting sold off by hedge funds right now is Microsoft (MSFT). Hedge funds sold 9.15 million shares of the Redmond, Wash.-based software firm in the last quarter. That decreased their collective stake in the stock by more than a quarter -- and around a half billion dollars.

>>5 Hated Stock Set to Soar on Earnings

Microsoft is the firm behind products such as the standard-bearer Windows operating system, the Office suite of productivity tools and a bevy of enterprise applications. Notice that I called Microsoft a software firm; even though MSFT does make hardware like the XBOX and now the Surface tablet, software remains the biggest part of its revenue by far. And the firm's huge installed base means that dominance (and those cash flows) are likely to continue for some time.

Like Apple, Microsoft has a huge cash position. At last count, the firm sported more than $78 billion in cash and investments on its balance sheet, offset by a $12 billion debt load. That's $7.80 per share in net cash, a nice safety net by any measure.

To be clear, MSFT doesn't look like much of a growth stock right now. It operates in a saturated market, and management has been grabbing at straws to find a new niche. But consistent sales, tons of cash and a hefty 3.3% dividend yield make hedge funds' hate of this stock look misplaced.

3 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs