As the market rallies, investors need to be careful they don’t step into overcrowded trades, according to Morgan Stanley. The S & P 500 is up more than 8% for November, putting it on track for its biggest monthly gain since July 2022. However, Morgan Stanley warned hedge funds are crowding into certain names, raising the possibility of volatile moves in the near term. “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,” analyst Todd Castagno wrote in a Wednesday note. The bank screened for stocks hedge funds are partial toward the most within the Russell 1000 index, based off regulatory filings. Specifically, Morgan Stanley looked for companies with the highest percentage of their float being owned by the largest hedge funds based on assets under management. Car rental company Avis is the premier hedge fund play overall on the list, owning more than 50.3% of the company’s float. Avis has ticked up roughly 10% this month. The company beat third-quarter earnings estimates earlier in November but reported slightly lower-than-expected revenue. CAR YTD mountain Avis stock in 2023 Planet Fitness has also drawn the attention of hedge funds, owning 14% of the company’s float. Shares of the gym operator have pulled back roughly 15% in 2023. PLNT YTD mountain Planet Fitness stock in 2023 Third-quarter results that topped Wall Street estimates helped boost the stock in November. Month to date, shares have surged 22%. Some analysts have also opined that the gym stock could be a key beneficiary of the rise of GLP-1 drugs . Ride sharing company Lyft also made the list. Morgan Stanley’s data shows hedge funds are owners more than 13% of the firm’s float. Lyft, alongside peer ride sharing company Uber, recently settled litigation over driver allegations of wage theft, and also agreed to amend its payment structure and benefits package. LYFT YTD mountain Lyft stock YTD