Top Hedge Funds Share Their Top Picks

Looking for a new stock or investment idea? You might be in luck after Bloomberg asked hedge fund managers for their best investment ideas.

As part of a ranking of the 50 best-performing hedge fund managers with at least $1 billion in assets, Bloomberg listed the top-ranked managers' top picks.

Mudrick Distressed Opportunity Fund

Jason Mudrick is the manager of the Mudrick Distressed Opportunity Fund, which notched a 38.7 percent return in 2016.

He told investors in early January that there's still an opportunity to earn a profit in commodity-related credits due to the discrepancy between private distressed credit-market valuations and public equity-market valuation.

Contrarian Capital Fund I

Bill Raine co-manages the Contrarian Capital Fund I. He told Bloomberg investors could benefit from investing in energy companies that have restructured their business models, now boast stronger balance sheets and can start drilling in "very, very attractive" basins.

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Raine also finds hospitals and pharmaceutical companies attractive, and said there will be winners (and losers) from changes that are expected to be made to the Affordable Care Act.

Magnetar Capital's MTP Energy Fund

Eric Scheyer co-manages Magnetar Capital's MTP Energy Fund. He also found energy companies attractive and told Bloomberg the sector will see a lot of M&A activity, which represents an opportunity for investors "with flexible strategies."

CQS Directional Opportunities Fund

Michael Hintze runs the CQS Directional Opportunities Fund. He suggested investors should consider investing in corporate debt. Specifically, Hintze said to investors in a letter last December that corporate debt could benefit from fiscal stimulus. Moreover, while default rates are likely to rise, they should remain relatively low, especially if inflation ticks up, Hintze said.