) -- Valentine's Day may have been a few weeks back, but the real love story is going on right now: It's all about how institutional investors are feeling about stocks again.
Slowly but surely, professional investors are getting the message that this market is going to continue to plow ahead in 2013. Yesterday's all-time highs in the
don't hurt in conveying that message. Institutions such as hedge funds, pension funds, and asset managers are buying equities again with both hands.
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The question is whether you should be following their lead.
Even if institutions are making the right big move by buying stocks, are they buying the
stocks? I'll admit that some of their choices look surprising right now, but they're worth a closer look.
To do that, we're focusing on 13F filings. Institutional investors with more than $100 million in assets are required to file a 13F -- a form that breaks down their stock positions for public consumption. From hedge funds to mutual funds to insurance companies, any professional investors who manage more than that $100 million watermark are required to file a 13F.
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In total, approximately 3,400 firms file 13F forms each quarter, and by comparing one quarter's filing to another, we can see how any single fund manager is moving their portfolio around. While the data is generally delayed by about a quarter, that's not necessarily a bad thing. Research shows that applying a lag to institutional holdings can generate positive alpha in some cases. That's all the more reason to crack open the moves being made with institutions' $14.6 trillion under management.
Today, we'll focus on
five institutional favorites for the fourth quarter of 2012
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