These names have proven to be very popular among hedge fund managers around the world.
Towards the end of the just-completed first quarter, US-based hedge funds began dumping US stocks and moving capital into European stocks. According to an analysis by an investment bank, morgan stanley (New York Stock Exchange:M.S.) found that hedge funds have been “buying EU stocks almost 70% of the time” since European stock markets started rising in January this year. Hedge fund exposure to Europe rose from less than 17% at the end of 2023 to about 19% at the end of the first quarter of this year, according to Morgan Stanley.
The move into European stocks comes amid growing concerns that U.S. stocks have become too expensive and are in overbought territory. Europe’s main STOXX 600 index is up 7% since the start of the year, lagging the 10% rise in the benchmark US S&P 500 index. The S&P 500 index currently trades at 21 times forward earnings, while European stocks trade at 14 times forward earnings.to data from american bank (New York Stock Exchange:BAC).
In a recent note to clients, the investment bank said: goldman sachs (New York Stock Exchange:G.S.) “Europe has room to catch up with the United States,” he said, as the discount rate between the two countries is at an all-time high. Here are hedge fund favorites: Here are his three European stocks that are attracting significant investment from the US.
Novo Nordisk (NVO)
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Soros Fund, the hedge fund managed by billionaire investor George Soros, has started accumulating a stake in the Danish pharmaceutical giant. novo nordisk (New York Stock Exchange:NVO) Last fall, it bought 1.5 million shares worth $138.8 million. The Soros Fund is one of several hedge funds buying up shares in the company that makes the popular weight-loss drugs Wigovy and Ozempic. A surge in demand for weight loss drugs has seen NVO inventories increase by 60% in the past 12 months, including a 25% increase by 2024.
Huge demand for weight loss drugs and rising stock prices have made Novo Nordisk Europe’s largest listed company, with a current market capitalization of $437.25 billion. Hedge funds have been buying up shares of NVO due to expectations for strong future earnings and because the company is developing a weight-loss drug to replace the current injections used to deliver drugs. The pill is predicted to be a game changer for the fast-growing weight loss prescription market.
ASML Holding (ASML)
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Dutch semiconductor company ASML Holding (NASDAQ:ASML) is owned by so many hedge funds that Morgan Stanley released a report in February that found ASML to be one of the most “overowned” stocks in Europe. The company specializes in the development and manufacture of photolithography equipment, which is essential for the production of computer microchips. artificial intelligence (A.I.) has fueled demand for ASML’s technology, driving the stock up nearly 40% this year alone.
Appaloosa Management , a hedge fund run by prominent investor David Tepper, has been betting heavily on ASML stock since the second half of last year. Appaloosa first opened a position in ASML Holdings stock last August, purchasing $58 million worth of stock. Since then, hedge funds have steadily increased their stakes. ASML Holding is expanding its role in the global semiconductor market, particularly in China, as AI technology fuels a renaissance in the sector.
Star bulk carrier (SBLK)
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star bulk carrier (NASDAQ:SBLK) is a lesser-known European company and stock. Star Bulk Carriers is a global shipping company based in Greece. We operate carriers that transport iron ore, coal, and grain between Europe, North America, and Asia. SBLK stock has received little attention, but it has proven to be a very good investment. It’s up 14% in the past 12 months and 222% in the past five years. Additionally, the company’s stock trades at just 13 times forward earnings estimates.
SBLK stock pays a hefty quarterly dividend of 36 cents per share and has a yield of 6%. So which hedge fund giant owns Star Bulk Carriers? None other than Michael Burley, the famous investor featured in the book and movie The Big Short. Berry currently owns 250,000 shares of the company’s stock, valued at just under $6 million. Star Bulk Carriers is one of the few European stocks held by the Belize Scion Asset Management hedge fund, according to its latest 13F securities filing.
On the date of publication, Joel Baglor did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing Guidelines.
