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The 10 Stocks That Hedge Funds Love Most

Goldman's VIP List

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Goldman Sachs has revealed its list of stocks most loved by the nearly $2 trillion hedge fund industry so that clients can "follow the smart money," the firm said.

Goldman's so-called VIP list, comprising stocks that appear most often among hedge funds' top 10 holdings, has outperformed the S&P 500 this year and is up 19 percent. The portfolio beat the market last year, too, with a 23 percent gain, so it may pay to follow the VIPs.

No. 10 Hertz

Hertz airport shuttles at Chicago's O'Hare International Airport
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Hedge funds are buying the No. 1 auto-rental chain as sales continue to beat expectations following its takeover of Dollar Thrifty last year. It's among the top plays of Highbridge Capital Management, a $25 billion behemoth in the hedge fund community.

No. 9 Microsoft

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After trailing the market in the first quarter on a Windows 8 rollout stumble, Mr. Softie has exploded higher as investors flock to its dividend payout. Seth Klarman's Baupost Group is making a bullish bet that it will continue as a new Xbox hits the market.

No. 8 News Corp.

News Corp. headquarters in New York
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Rupert Murdoch's media empire is off to its best start in seven years. Eton Park is the second-biggest holder among hedge funds, followed closely by Lone Pine and Tiger Global Management.

No. 7 Virgin Media

Sir Richard Branson, CEO of Virgin Media
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Astute hedge funds jumped into this stock before John Malone's Liberty Global took it over in February in a cash and stock deal. They may be sticking around for their stock payout as Liberty Global challenges News Corp.'s BSkyB for European dominance.

No. 6 Priceline.com

Scott Eelis | Bloomberg | Getty Images

The travel-booking site shook off concerns about a slowdown in Europe and brought back William Shatner as pitchman for good measure. Eric Mindich, a Goldman alum now running the highly successful Eton Park Capital, is a top holder in this name.

No. 5 General Motors

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Along with AIG, this company is a financial-crisis comeback story that hedge funds have been piling into as it gains market share in China and ramps up production here at home. This is a favorite of both Greenlight's David Einhorn and David Tepper at Appaloosa Management.

No. 4 Citigroup

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While JPMorgan's Jamie Dimon is getting all the press, Citigroups CEO Michael Corbat has been quietly racking up major gains this year after getting the Fed's blessing to repurchase a $1 billion chunk of stock. Richard Pzena is a big holder in this one.

No. 3 Apple

Apple's flagship New York store.
Adam Jeffery | CNBC

The once-golden iPhone maker bottomed last month after doubling its capital distribution plan, and top hedge funds are coming along for the ride. They include Greenlight's David Einhorn and David Tepper at Appaloosa Management.

No. 2 Google

The Google I/O developers' conference in San Francisco
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The omnipresent search company has supplanted Apple as the tech play of the moment for the big money. Soros Fund Management and Tiger Global Management both added to their positions in the last quarter.

No. 1 AIG

Adam Jeffery | CNBC

The insurance giant bailed out by the government in the financial crisis repeats in the VIP list's premier position, with 79 hedge funds making it one of their top bets. Notable players in this stock include Third Point's Daniel Loeb and Omega Advisors' Lee Cooperman.