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Explaining A 'Crowded Trade,' And The Top 10 Cramped Plays Right Now

Jayson Derrick

Simply put, a "crowded trade" refers to a stock that is widely held across active managers in different countries across the world.

Analysts at UBS compiled a list of the top 10 crowded trades based on the sum of all the "holdings in dollar value across all the active managers and calculate the weights of stocks in this active trading portfolio." Investors can likely come to one of two conclusions regarding a "crowded trade" stock:

  • If so many fund managers across the world own a stock they must do so for a reason and expect a superior return.

  • If so many fund managers across the world own a stock then it is likely too late for the individual investor to buy the stock and expect a superior return.

Investors are free to come to their own conclusions as to how to view a "crowded trade."

Overweight Names

Here are the top 10 Overweight names as compiled by UBS.

  • AFLAC Incorporated (NYSE: AFL).

  • Alibaba Group Holding Ltd (NYSE: BABA).

  • UnitedHealth Group Inc (NYSE: UNH).

  • Microsoft Corporation (NASDAQ: MSFT).

  • Broadcom Ltd (NASDAQ: AVGO).

  • Visa Inc (NYSE: V).

  • Priceline Group Inc (NASDAQ: PCLN).

  • Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL).

  • Comcast Corporation (NASDAQ: CMCSA).

  • Medtronic plc. Ordinary Shares (NYSE: MDT).

Underweight Names

Here are the top 10 Underweight names as compiled by UBS.

  • Apple Inc. (NASDAQ: AAPL).

  • Exxon Mobil Corporation (NYSE: XOM).

  • Johnson & Johnson (NYSE: JNJ).

  • Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B).

  • Procter & Gamble Co (NYSE: PG).

  • General Electric Company (NYSE: GE).

  • Tokyo-listed Toyota Motor Corp (TYO: 7203).

  • London-listed HSBC Holdings plc (LON: HSBA).

  • Australia-listed Commonwealth Bank of Australia (ASX: CBA).

Latest Ratings for AAPL

Date

Firm

Action

From

To

Aug 2017

Nomura

Maintains

Buy

Aug 2017

Barclays

Maintains

Equal-Weight

Aug 2017

Deutsche Bank

Maintains

Hold

View More Analyst Ratings for AAPL
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