Hedge funds -- private investment partnerships for wealthy individuals and institutions -- are thought to be managed by well-informed, talented investors. Where are they placing their stock bets in this highly volatile market? And does the investing community agree? Let's see what CAPS has to say on the matter. The Fool's community of more than 130,000 uses the wisdom of crowds to determine which companies might be worth investing in.

Running a screen on companies with a market value greater than $2 billion, I found that the following five are near the top in terms of the increase in the percentage of shares owned by hedge funds:


% Owned by Hedge Funds (Latest)

% Owned by Hedge Funds (Latest Quarter)

CAPS Rating (1-5)

Southern Copper (NYSE:PCU)




Terra Industries (NYSE:TRA)




CF Industries (NYSE:CF)




Ctrip.com (NASDAQ:CTRP)




Pioneer Natural Resources (NYSE:PXD)




Source: CAPS and Capital IQ, a division of Standard & Poor's.

This data needs to be interpreted with some caution. For one thing, hedge funds that trade actively may no longer own the stocks by the time ownership data is reported. For another, this table contains some ideas for further research -- they are by no means recommendations.

Furthermore, while Southern Copper's absolute increase in ownership percentage is about 33 basis points, or approximately $50 million in value, that's hardly a massive flow.

However, tracking hedge funds isn't the only way to gather intelligence on stocks. At Motley Fool CAPS, it's the community that produces stock intelligence by allowing professional and amateur investors alike to rate stocks. As it happens, Southern Copper garners a five-star rating (the highest) in CAPS.

Here's what CAPS member bridgeboy0 -- who is ranked among the top 1% of members -- wrote on Southern Copper earlier this month:

When things turn around it will be a result of the governments around the world having pumped money of all kinds into the system. This will cause a surge in inflation as economies start to tick up. That's why I've been and continue to be bullish on precious metals and the miners of said metals. Really, anything that is sensitive to inflation is a good place to be.

I absolutely agree with bridgeboy0 that once (not if) the inflation genie is out of the bottle, central banks will have a devil of a time putting it back in. As inflation gnaws away at the value of paper currencies, hard assets become more attractive. In fact, last February I wrote a piece on the merits of investing in gold through products such as the SPDR Gold Shares ETF (NYSE:GLD). Southern Copper might be a fine example of the "reflation trade."

If you think Southern Copper will outperform or underperform the market, go over to CAPS to make your first pick -- over 130,000 members have already rated more than 5,200 stocks. You'll be joining an ongoing debate with other talented investors, but this is no parlor debate: It's the engine behind a powerful ranking system for stocks. Add your horsepower to that engine today!

Alex Dumortier, CFA, has no beneficial interest in any of the companies mentioned in this article. Ctrip.com International is a Motley Fool Hidden Gems pick. The Motley Fool has a disclosure policy.