Is China Lodging Group, Ltd (ADR) (NASDAQ:HTHT) the right pick for your portfolio? The smart money is getting more optimistic. The number of long hedge fund positions increased by 2 recently.
If you’d ask most stock holders, hedge funds are seen as worthless, outdated financial tools of yesteryear. While there are over 8000 funds trading today, we hone in on the moguls of this club, about 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total capital, and by watching their best equity investments, we have identified a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as beneficial, positive insider trading sentiment is a second way to parse down the marketplace. There are many stimuli for an executive to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this strategy if investors know what to do (learn more here).
Consequently, it’s important to take a peek at the recent action regarding China Lodging Group, Ltd (ADR) (NASDAQ:HTHT).
Hedge fund activity in China Lodging Group, Ltd (ADR) (NASDAQ:HTHT)
In preparation for this quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of 33% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably.
When looking at the hedgies we track, Lone Pine Capital, managed by Stephen Mandel, holds the most valuable position in China Lodging Group, Ltd (ADR) (NASDAQ:HTHT). Lone Pine Capital has a $18.3 million position in the stock, comprising 0.1% of its 13F portfolio. On Lone Pine Capital’s heels is Lei Zhang of Hillhouse Capital Management, with a $3.6 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and Richard Chilton’s Chilton Investment Company.
As industrywide interest jumped, key money managers have been driving this bullishness. Chilton Investment Company, managed by Richard Chilton, established the most outsized position in China Lodging Group, Ltd (ADR) (NASDAQ:HTHT). Chilton Investment Company had 0.8 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.3 million investment in the stock during the quarter.
How have insiders been trading China Lodging Group, Ltd (ADR) (NASDAQ:HTHT)?
Insider buying is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time period, China Lodging Group, Ltd (ADR) (NASDAQ:HTHT) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to China Lodging Group, Ltd (ADR) (NASDAQ:HTHT). These stocks are Choice Hotels International, Inc. (NYSE:CHH), Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP), 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN), Home Inns & Hotels Management Inc. (ADR) (NASDAQ:HMIN), and Orient-Express Hotels Ltd. (NYSE:OEH). All of these stocks are in the lodging industry and their market caps are closest to HTHT’s market cap.