Business & Investment

Amazon became a hedge fund favorite shortly before the stock fell

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Hedge funds were Amazon.com Inc in the second quarter. He was at the forefront of the loss as he was piled up in the city and the ban on going out began to be lifted.

According to RBC Capital Markets, online retailers abolished Microsoft as the number one stake in hedge funds between April and June. Goldman Sachs Group, Inc. strategists also said that hedge funds had the greatest increase in popularity during that period.

With doubts about the company’s growth, its ownership surge appears premature, as it plummeted 15% from its peak in early July. Investors have hit online retailers as part of a widespread rotation since late July from pandemic winners to companies that will benefit from the reopening, following a surprisingly weak forecast.

According to the RBC, this has hurt the hedge fund portfolio, which weighs heavily on stay-at-home growth stocks, at the expense of more cyclical styles such as value.

Amazon’s stock price has plummeted in recent weeks.

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“If we get the value of another big outperformance trade in the medium term, as we think it will, we expect to see more underperformance when the current COVID cloud clears,” RBC said. Lori Calvasina, Head of US Equity Strategy, said: Her report August 20th.

Bloomberg News’ analysis of filings from more than 800 hedge funds depicts a similar situation. Eighty-three of them have more than 5% of their disclosed equity investments in Amazon, while their peers have an average of six hedge funds that own five or more. %. They are not the only ones. All 55 analysts who value stocks call it a “buy.”

Amazon surprised investors in July, when it missed its quarterly sales quote for the first time since 2018, and warned that growth in its core e-commerce business would slow. Reported plans to open some big department store-like locations in the United States have so far failed to thwart slides that have cut about $ 270 billion from the company’s market value.

Meanwhile, the surge in vaccination and economic growth has spurred a small revival since late July of value trade aimed at buying cheap stocks at the expense of high-priced names.

Earlier this year, hedge funds boosted exposure to such periodic names, but they later reduced their bets.

In the second quarter, technology and media names continued to dominate the hedge fund portfolio, including Microsoft, Alphabet Inc., Facebook Inc. and Apple Inc. Concludes the top five names on the RBC list. Banks analyzed 325 hedge fund holdings based on regulatory submissions.

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Amazon became a hedge fund favorite shortly before the stock fell

https://www.ttnews.com/articles/amazon-became-hedge-fund-favorite-just-shares-tumbled Amazon became a hedge fund favorite shortly before the stock fell

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