BALTIMORE ( Stockpickr) -- Love is in the air on Wall Street. Even though Valentine's Day is still months away, fund managers have been penning love letters to a handful of their favorite stocks in the last several weeks. Now, the question is whether it makes sense to fall for the pros' favorite stocks too.
Must Read: Warren Buffett's Top 10 Dividend Stocks
There's no question about it, funds' favorite stocks fell into two broad categories last quarter: the technology and finance sectors.
We know that because of their love letters to the broad market -- I'm talking about 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 3,800 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' $20.5 trillion under management.
Interestingly, professional investors also took a step back from their defensive posturing in the most recent quarter, opting to pick up shares of two big IPOs. So, without further ado, here's a look at hedge funds' 5 favorite stocks.
Must Read: 12 Stocks Warren Buffett Loves