BOSTON ( TheStreet) -- Hedge funds took a surprisingly contrarian tack in the second quarter, bulking up on consumer-discretionary stocks, despite slowing global economies, high unemployment and signs that Americans are getting stingier.The consumer-discretionary stocks sector grew by 1.1 percentage points to a 16.1% weighting of the $1.2 trillion in assets held by 795 hedge funds tracked by Bloomberg, double the growth of any other industry. Consumer-discretionary companies' products range from alcohol, personal-care products and luxury goods to services ranging from restaurants to travel and entertainment.
Qualcomm ( QCOM) had 7.4 million in shares bought in the quarter, giving it an aggregated market value of $5.2 billion among hedge funds. Its total market value is $86 billion. The company owns the rights to a communications standard used in wireless networks and it has leveraged that into the semiconductor market, where the firm is a key supplier of chips to wireless handset makers and also generates royalty revenue by licensing its intellectual property. Late in July, Qualcomm reported a 35% increase in its third- quarter earnings and boosted its guidance for the year due to strong global demand for smartphones and a recent acquisition.
Macy's ( M), the department-store chain, saw investors gobble up 8.8 million shares, resulting in aggregate hedge-fund holdings of $2.2 billion. The company operates around 800 Macy's stores and 40 Bloomingdale's stores nationwide, selling apparel, accessories, cosmetics, home furnishings and other consumer goods. In its second quarter, earnings rose 64%, propelled by strong sales. For the quarter ended July 30, Macy's reported a profit of $241 million, or 55 cents per share, and raised its earnings outlook for the rest of the year.
Expedia ( EXPE), the online-travel Web site, saw 23 million in share-buying, and hedge funds now own $1.4 billion of its shares. The company is the world's largest online-travel agent, providing booking services for hotel rooms, airline tickets, rental cars, cruises, package tours and other travel products. It operates primarily under its Expedia.com brand, but also owns Hotels.com, Hotwire.com and TripAdvisor.com, and holds majority stakes in China-based eLong.com. Two weeks ago, Expedia reported that second-quarter earnings rose a better-than-expected 23% due to a jump in international-hotel bookings and growing advertising revenue.