BALTIMORE (Stockpickr) -- If you go to any number of investment conferences around the world, you'll find no shortage of professional fund managers talking their book. The fact is that professional investors are only too happy to talk about the stocks they've been buying -- but they rarely pipe up about the names they're selling.
That's not surprising. For hedge fund managers, revealing the "sell list" is an act of contrition. Even disciplined investors don't like admitting spotlighting the names they're getting creamed on.
And consumer discretionary stocks are a perfect example of that. No other sector got sold off as hard as consumer discretionary stocks did in the first quarter of 2014. And that's giving us some crucial data to look at as summer fast approaches.
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Investors love knowing what the pros are buying that's only natural. But it's the sell list -- the names that institutional investors hate the most -- that represents some of the biggest conviction moves. Scouring fund managers' hate list is valuable for two important reasons: It includes names you should sell too, and it includes names that could soon present buying opportunities.
Why would you buy a name that pro investors hate? Often, when investors get emotionally involved with the names in their portfolios, they do the wrong thing. The big performance gap between hedge funds and the S&P 500 Index in the last year is proof of that. So that leaves us free to take a more sober look at the names fund managers are capitulating on.
Luckily for us, we can get a glimpse at exactly which stocks top hedge funds' hate lists by looking at 13F statements. 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. So far, 1,798 hedge funds filed the form for the most recent quarter, so by comparing one period's filing with another, we can get a sneak peek at how early filers are moving their portfolios around.
Without further ado, here's a look at five stocks fund managers hate.