- CNBC used Symmetric.io, a hedge-fund tracking firm, to find the best stock-picking hedge funds and the stocks they are buying.
- Symmetric.io grades the stock-picking ability of nearly 1,000 hedge funds in its database by comparing the performance of equities in the fund with that of a sector exchange-traded fund.
- The data reflect fourth-quarter holdings that hedge funds disclosed last week in required quarterly filings.
In the hedge fund industry, much of the attention is given to big names such as David Einhorn and Bill Ackman, but some smaller, lesser-known fund managers have been better at picking stocks over the years. Here's what they are betting on next.
CNBC used Symmetric.io, a hedge-fund tracking firm, to find the best under-the-radar managers and which stocks they recently bought based on regulatory filings.
Symmetric.io grades the stock-picking ability of nearly 1,000 hedge funds in its database with a proprietary indicator of performance called StockAlpha. It is derived by comparing the performance of equities in the fund with that of a sector exchange-traded fund.
Aisling Capital, First Light Asset Management, Goodnow Investment Group are among the top stock-picking hedge funds with a track record of beating the market over the last three years. These hidden gems are mostly run by managers who are not household names.
Four times a year, hedge funds file their long positions with the Securities and Exchange Commission, and the information is released to the public 45 days after each quarter ends.
Here are the top hedge funds' new positions based on these fourth-quarter filings.
Aisling Capital is concentrated in healthcare and more than 80 percent of its investment has been in Loxo Oncology, a Stamford, CT-based cancer medicine developer, which soared 66 percent in 2018 and landed an $8 billion acquisition bid from Eli Lilly in January.
The winning hedge fund Aisling Capital is up a whopping 56.6 percent year to date, after returning 34.8 percent in 2018. First Light Asset Management gained 41.7 percent last year and is up 20 percent so far this year.
Hedge funds overall are having a strong comeback in 2019, posting a 3.5 percent return in January, the best monthly performance since September 2010, according to Hedge Fund Research.