Facebook Inc was hedge fund managers’ most sought stock during the first quarter of 2016, according to a comprehensive FactSet analysis of public filings of the 50 biggest funds.
FactSet data showed that over $3 billion shares of the tech giant were bought by the leading hedge funds during the first three months of the year. Andreas Halvorsen’s Viking Global acquired the largest chunk of those shares, while Facebook is the top holding of Philippe Laffont‘s Coatue Management.
Facebook Inc Gains at Apple Inc.’s Cost
Robust earnings, strong user growth and rapidly accelerating advertising momentum were at the core of investors’ decision to scoop up shares of the social network. Facebook, with its nearly 1 billion daily active mobile users, easily topped first quarter earnings estimate, which seemed to vindicate the overtly bullish outlook of hedge fund managers.
Contrast that with the fortunes of Apple Inc. – a stock that swiftly made the transition from the darling of last year to one that investors couldn’t sell fast enough. FactSet figures showed that hedge fund managers shed close to $7 billion of the iPhone maker’s shares during the first quarter of 2016.
The hedge fund rotation from Apple to Facebook was reflected in how the respective shares performed during the first three months. Facebook soared 9 percent during Q1, compared to a lacklustre 3.5 percent rise in Apple during the same period. On a trailing 12-month basis, FB has gained 12 percent, while Apple’s stock is down almost 10 percent.
Facebook Inc Stock is Scaling New Peaks
From an investor standpoint, it is important to note that FactSet derives its hedge fund data from quarterly 13F filings, which have a 45 day lag. As such, their utility as a tool for stock forecasting is limited.
To get a better view of where Facebook currently stands, let us look at the daily price chart of the stock. Shares have been in a strong up trend since the start of the year, plotting successive higher peaks and higher troughs. After hitting a high of $121, the stock has retraced to the strong support zone around $117, which coincides with multiple past price pivots.
The bullish trend is intact as long as $110 holds. On the upside, a break out above $121, on strong volumes, could unlock further upside in the stock.
Shares of Facebook Inc closed Friday at $117.35.