Hedge funds added more exposure to financial and tech names in the last quarter, according to Morgan Stanley. In a recent report, the bank examined the latest form 13F filings with the Securities and Exchange Commission by large investors to find stocks with the greatest ownership increases. Strategist Todd Castagno noted that this was a beneficial exercise for investors who want to get ahead of the game. “Crowded trades come with the risk of overvaluation and increased volatility as it may be more difficult to attract the marginal investor, while avoiding overcrowded stocks can provide investors with an opportunity to capture unrecognized value when paired with strong fundamentals,” he wrote. Castagno highlighted that in the last quarter, hedge funds seemed to shift their portfolio allocations toward the information technology and financials sectors, moving away from health care. However, hedge funds still remain most overweight stocks within the health care, consumer discretionary and industrials industries. Here are a few of the stocks that saw the largest ownership increases last quarter among hedge funds: With an ownership share increase of 2.7%, hospital management company Universal Health Services made the list. The stock has gained more than 17% this year. Earlier this week, UBS upgraded shares of Universal Health Services to a buy rating from neutral. “We expect UHS to return to its longer term trend of 3-4% volume growth in the segment. Pricing should also remain strong, which will make up for any bumps in the road on the volume side,” wrote analyst A.J. Rice. Hedge funds have recently increased their ownership shares in retailer Bath & Body Works by 2.5%. Last week, JPMorgan upgraded the stock to a neutral rating from underperform, citing the company’s stabilizing revenue growth. Shares of Bath & Body Works are up 12% in 2024. Airline carrier Alaska Air Group has seen its hedge fund ownership share increase by 1.5% in the last quarter. The stock is up more than 11% so far this year. Wolfe Research upgraded shares of Alaska Air Group to outperform from peer perform last Friday. “ALK is facing several emerging tailwinds on the West Coast with an accelerating corporate recovery, improving competitive capacity and lower regional jet fuel prices. As a result, we see a favorable combination of EPS upside and an attractive valuation,” the firm wrote. Other names on the list included e-commerce company Etsy , asset manager TPG , information tech services provider DXC Technology and car rental company Avis Budget Group . — CNBC’s Michael Bloom contributed to this report.