) -- Normally, the words "venture capital" conjure up thoughts of closed-door deals in private equity that retail investors can't touch. But it ain't necessarily so. In fact, venture capital firms own more publicly traded stocks than you might think -- more than $53 billion of it in fact, in the last quarter.
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When a venture capital firm buys up a position in a publicly-traded firm, it says a lot. After all, VCs have access to private investments that retail investors can only dream of. They're constantly pitched by the best and brightest entrepreneurs around the world, so the decision to buy stocks comes with one obvious conclusion: It's offering the best risk/reward tradeoff right now.
If venture capital professionals are making big bets in public equity, investors had better pay attention. That's why we're taking a look at VCs' 5 favorite stocks today.
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' $16.3 trillion under management.
Today, we'll focus on
five venture capital favorites from the last quarter
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