Jefferies' equity strategist Steven DeSanctis warned investors of the darling stocks the most active funds own.
div > div.group > p:first-child"> This is the advice from Jefferies' equity strategist Steven DeSanctis, who warned investors of the darling stocks the most active funds own. As those high-turnover hedge funds trade and replace holdings most often, their top-owned stocks will most likely get dumped once sentiment turns. It's important to recognize those crowded trades and get out before they unwind, he said.
"In times of stress, investors need to focus on who owns what stocks, which funds are more likely to 'blow out' a name and impact performance," DeSanctis said in a note to clients on Thursday. "The thought here is that when the market gets rocky, who is likely to purge names and who would likely add to positions. Knowing this may help investors decide whether to buy or sell a stock; also just to understand who owns names that you hold is becoming increasingly important," DeSanctis said.
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