Billions return to screens this week which leads us straight back to the world of Hedge Funds. Often considered the big-dogs on campus, these firm move billions to generate their alpha (excess returns) by using both the long and short side of a trade.
According to Bank of America, these are the stocks the top 20 hedge funds are most bullish and bearish about. Of course, hedge funds employ very different criteria and rationale for a trade (i.e a relative value pairing…), so do your own research before taking the position of Wall St magnates like Simons, Dalio, Tudor Jones and Singer as gospel.
Most shorted stocks by HFs
– Nordstrom (JWN) -3.29% in the past week
– Mattel (MAT) -2.58%
– Discovery (DISCA) -1.25%
– Microchip Technology (MCHP) -1.82%
– TripAdvisor (TRIP) -1.95%
Most long exposure by HFs
+ Twenty First Century Fox Class A (FOXA) -0.34%
+ Incyte (INCY) -0.85%
+ Arconic (ARNC) +1.46%
+ IQVIA (IQV) -1.62%
+ Capri Holdings (CPRI) -1.06%
Big time VC
Companies can access capital in a variety of ways to grow their businesses. Debt, equity raising and a combination of both are common ways to fund growth. A form of equity fund-raising, Venture Capital aka VC, has help drive some companies to great heights as they mature. Sometimes it ends in tears and blood….Theranos for example.
VC money is often an attractive proposition for founders, in that it brings both capital and less scrutiny — courtesy of less regulation and paperwork.
Pitchbook, a financial data and software company focusing on capital moving through the private and VC market, recently release their finding of the world’s biggest VC backed companies:
Uber (USD$72Billion valuation), having raised $24bn in funding so far…
As you can see, even those these companies are private they are by no means small. On the note of Uber, here’s a look at their first ever pitch deck over a decade ago. We expect it to list at some point in 2019 which will most likely be the biggest IPO of the year.
Cheers for the Feedback
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Equity Mates’ search for Australia’s Next Top Trader kicked off on Monday and one trader flew out of the gate. The Canberra Uni student added 17.6% on USA Technology. Although it’s early in the race, this trader is currently wearing the yellow jersey….and with a 10+% lead they have one hand on the ticket to the NY Stock Exchange.
Remember, it’s not too late to make your push and book your ticket to NYC. Sign up here.
Down with the Dow
Stake HQ is an easy going place but there are some boundaries than can never be crossed. Mentioning what the Dow did is a serious offence. The Dow Jones tracks the performance of 30 of the biggest US stocks. The problem? The number means nothing.
DJI is a price weighted index (in place of market cap). With a share price of just on $400 Boeing’s stock accounts for 11% of the Dow’s movement, despite also containing much bigger companies like Apple and Microsoft, which represent far less purely based on their share price.
The recent Ethiopian Air tragedy dragged the Dow’s performance down relative to others, as the Boeing dropped 11% to open Monday’s session. While the index added 0.77%, the overall figure was not representative of the strong day for the other 29 companies. Without Boeing in the index, the DJI would have been up over 1.5%.
For a better idea of how the market is doing keep your eye on the broader SP500 and Russell 2000. The Nasdaq is always interesting, but only accounts for 100 tech stocks…at least its market cap weighted!