BALTIMORE (Stockpickr) -- There's nothing hedge fund managers love more than talking their books Professional investors relish every opportunity to go on TV or speak at a conference to tell you what they're investing in (and why you're making a mistake by not doing the same). That's part of the reason why retail investors get fixated on the stocks that fund managers are buying.
But finding out which stocks fund managers are selling can often be even more useful for investors.
For starters, admitting to their "sell list" is usually an act of contrition for hedge funds; even the most disciplined investors don't like admitting spotlighting the names they're getting creamed on. Sure, 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 represent 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.
That's why, today, we're taking a closer look at five stocks that topped hedge funds' sell lists in the last quarter.
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 and change 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, 495 hedge funds filed the form for the most recent quarter, so by comparing one period's filing to 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.