BALTIMORE (Stockpickr) -- Venture capital investors are all about buying the deals that you can't get into -- so what does it mean when they own the ones that you can?
Venture capitalists buy equity in early stage companies before they become public. Because they have access to more exclusive deals, VCs typically keep their money out of the public markets. After all, they're usually able to earn a much higher rate of return in their venture portfolios. Why would you buy Twitter (TWTR) today if you could have bought in three years ago?
But too many investors ignore the fact that many venture capital funds do own publicly traded stocks. Between private investments they've continued to hold onto after going public and new positions they've picked up on major exchanges, the biggest VCs currently hold a stock portfolio worth more than $1.2 billion today.
So if venture capital professionals are making big bets in public equity, investors had better pay attention. Thats why were taking a look at VCs five 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.
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, thats not necessarily a bad thing. Research shows that applying a lag to institutional holdings can generate positive alpha in some cases. Thats all the more reason to crack open the moves being made with institutions $16.3 trillion under management.
Today, well focus on five venture capital favorites from the last quarter.