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Goldman Sachs: Hedge funds hate these 10 stocks — including Nvidia, Walmart

Tae Kim

One of the main ways hedge funds make money is betting against companies they believe are overvalued, so investors should be wary of stocks with high levels of so-called short interest.

Goldman Sachs listed which stocks professional managers are short selling the most in its latest "Hedge Fund Trend Monitor" report by Ben Snider on Friday.

The firm's very important short positions basket consists of 50 S&P 500 stocks with the "highest total dollar value of short interest outstanding."

Shorting is a trading strategy that involves selling borrowed shares with a view that the stock will drop in value and the shares can be bought back later and returned for a profit.

Goldman's very important short positions list is up 0.7 percent this year through May 16, slightly underperforming the S&P 500's 2.6 percent gain, according to the firm.

Here are the top 10 stocks in Goldman's very important short positions basket.

The basket includes Nvidia , AT&T , Intel and Walmart .