The 25 Best Stocks to Buy (According to Hedge Funds)

Hedge funds often are referred to as the market's "smart money" because of their management's longtime expertise and penchant for making good investing decisions. Sure, they don't always live up to the hype, and they can be expensive. But they do comprise a large chunk of institutional investment dollars, and some do perform very well. So when you're looking for the best stocks to buy, it pays to see what these hedge funds are doing.

As WalletHub points out, hedge funds currently have $3 trillion in assets under management. What they're doing with those assets certainly is interesting, and perhaps even instructive.

Helpfully, WalletHub did a deep dive into which American stocks are most popular with U.S. hedge funds. Combing through regulatory filings, they looked at the positions of more than 400 hedge funds, added up the positions for the same stock, then ranked the stocks by their total holdings value.

Spoiler alert: Every one of these companies is massive by market value. Indeed, they would have to be to accommodate so much institutional interest. It also is no surprise that these stock picks are all household names.

Here's a look at the 25 best stocks to buy, based on how heavily they're held by hedge funds. Not every one of the following stocks is necessarily a buy at current prices, but there certainly are no dogs in the group. In other words, it's not hard to see why these stocks are the ones hedge funds love the most.

25. Boeing

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Market value: $201.8 billion

Dividend yield: 2.0%

Analysts' opinion: 13 strong buy, 0 buy, 4 hold, 0 sell, 0 strong sell

Boeing's (BA, $351.27) massive market value and blue-chip status - it's a member of the Dow Jones Industrial Average - make it a natural home for hedge funds and other institutional investors.

A long record of consistent share-price outperformance also helps explain why the aerospace giant is so popular with the hedge-fund crowd. Boeing has easily beaten the broader market over the last one-, three-, five- and 10-year periods.

Although trade-war fears have made for a volatile 2018, BA stock continues to be a market-beater. Shares were up 16% for year-to-date through Sept. 11, vs. a gain of 7% for the S&P 500.

Analysts forecast Boeing to generate average annual earnings growth of 21% for the next five years, according to data from Thomson Reuters. With an average recommendation of "Buy," analysts expect Boeing to keep flying high for the foreseeable future.

24. Booking Holdings

Getty Images

Market value: $90.6 billion

Dividend yield: N/A

Analysts' opinion: 13 strong buy, 3 buy, 10 hold, 0 sell, 0

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