An investment strategy that investors could consider is investing in stocks that hedge fund managers are buying. Hedge fund managers are highly compensated for their stock-picking abilities, so following their lead can allow you to build a strong portfolio without the high costs of paying a hedge fund. An even better strategy is investing in stocks where managers have a general consensus on stocks, and I’ve got four that managers love.
The Goldman Sachs Hedge Industry VIP ETF (GVIP) tracks an index managed by Goldman Sachs’ Global Investment Research division that consists of hedge fund managers’ high conviction ideas. The ETF has performed exceptionally well this year, up 32.7%, compared to the S&P 500’s 12.1% return. The ETF even has a “Strong Buy” rating in our POWR Ratings system.
We can take it a step further and invest in the ETF’s top holdings to get access to the very best ideas. I’ve gone through its top ten holdings and selected four stocks I believe have the best chance of strong returns over the near and mid-term. This includes JD.com, Inc. (JD), Salesforce.com Inc. (CRM), Pinterest, Inc. (PINS), and Qualcomm Inc. (QCOM).
JD.com, Inc. (JD)
While Alibaba (BABA) is known as the “Amazon of China,” JD may offer the best growth potential in Chinese e-commerce. After regulators in China issued antitrust draft rules, it is JD that stands to benefit. One of the rules proposed by regulators is an end to exclusivity. While BABA has built up its platform on exclusivity deals, JD stands to gain from BABA’s loss.
Also, BABA relies on third-party carriers for delivery, and if these new rules are implemented, JD will be able to differentiate itself through its logistics and delivery platform. In addition, the company recently announced its plan to build out a network of 5 million brick-and-mortar stores to integrate with e-commerce so that it can serve hard to reach areas. Plus, the company’s partnership with Tencent will allow it to reach more customers on Tencent’s high traffic WeChat app.
The company’s plan to leverage its logistics platform by providing third-party logistics services should drive long-term growth. The stock is rated a “Buy” in our POWR Ratings service. It holds a grade of “A” for Trade Grade and Peer Grade, and a “B” for Buy & Hold Grade and Industry Rank. The stock is also ranked #16 in the China industry.
Salesforce.com Inc. (CRM)
At the heart of every sale is a customer relationship management software, and CRM is the global leader in relationship management. A salesperson needs to keep track of prospects, clients, and communications. CRM provides that and more. The company has benefited from…
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