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Hedge funds stand by Facebook as their favorite stock pick

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Facebook (FB)  is still the No. 1 most held position among the equity hedge funds, even as the company faces what seems like an unending series of controversies related to privacy and global misinformation operations.

According to Goldman Sachs, 145 major hedge funds it follows owned Facebook at the beginning of the third quarter. Of those funds, 98 held the stock as a top 10 holding. In all, a record 28% of hedge funds in the sample owned Facebook at the start of the third quarter.

That said, some hedge funds have reduced their positions or abandoned the social networking stock altogether in recent months and put money to work elsewhere.

“The plunge of Facebook, which entered 3Q as the most popular hedge fund stock, likely accelerated a rotation from InformationTechnology to Health Care that was already in progress. Before its disappointing earnings results, 230 hedge funds (28%) in our sample owned FB, making it the most popular position. The average portfolio weight for FB among those funds was 4%. Among the 642 funds with between 10 and 200 distinct equity positions, 98 held FB as a top 10 portfolio position, ranking it as the top stock in our Hedge Fund VIP list.”

Goldman Sachs tracks 830 hedge funds with $2.3 trillion in gross equity positions, including $1.6 trillion long and $721 billion short.

Hedge funds loaded up on Facebook’s stock during the first quarter following the Cambridge Analytica scandal in March. The stock had recovered before plunging in late July following its disappointing earnings report.

Shares of Facebook have been volatile in 2018 amid the Cambridge Analytica scandal and disappointing earnings.

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.

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Written by Quad Oner


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