BALTIMORE (Stockpickr) -- It's official: We're kicking off another quarter of earnings season this week. Earnings season is a critical time for investors: It's the one chance each quarter to get full transparency on what's going on behind closed doors at thousands of publicly traded companies.
But while investors fixate on firms' latest filings, they're missing out on another SEC filing season that's shedding light on big moves happening behind the scenes. I'm talking about using a new set of 13F filings to peek at the buying going on in institutional portfolios right now.
What's a 13F anyway?
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.
In total, approximately 3,700 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 pro investors' $19.3 trillion under management.
Often, funds make very similar trades to one another. And since it's still very early in 13F season, we're able to use a small sampling of early filers to get a sneak peek at what funds are doing before the rest of the forms hit the SEC's servers.
Today, we'll focus on hedge funds' five favorite stocks.