After a lengthy stretch of outperformance, small-cap stocks suffered from July 2015 through June 2016, as heightened global economic fears led investors to flee to the safe havens of large-cap stocks and other instruments. Those stocks outperformed small-caps by about 10 percentage points during that time, with small-cap healthcare stocks being particularly hard hit. However, the tide has since turned in a big way, as evidenced by small-caps toppling their large-cap peers by 5 percentage points in the third quarter, and by another 5 percentage points in the first seven weeks of the fourth quarter. In this article, we’ll analyze how this shift affected hedge funds’ Q3 trading of Vail Resorts, Inc. (NYSE:MTN) and see how the stock is affected by the recent hedge fund activity.
Is Vail Resorts, Inc. (NYSE:MTN) the right pick for your portfolio? Money managers are becoming hopeful. The number of bullish hedge fund bets improved by 2 lately. MTN was in 35 hedge funds’ portfolios at the end of the third quarter of 2016. There were 33 hedge funds in our database with MTN holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as AptarGroup, Inc. (NYSE:ATR), Watsco Inc (NYSE:WSO), and Orbital ATK Inc (NYSE:OA) to gather more data points.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year, involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.
Now, we’re going to take a look at the latest action encompassing Vail Resorts, Inc. (NYSE:MTN).
What have hedge funds been doing with Vail Resorts, Inc. (NYSE:MTN)?
Heading into the fourth quarter of 2016, a total of 35 of the hedge funds tracked by Insider Monkey were long this stock, 6% higher from the second quarter of 2016. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ric Dillon’s Diamond Hill Capital has the number one position in Vail Resorts, Inc. (NYSE:MTN), worth close to $50 million and corresponding to 0.3% of its total 13F portfolio. The second largest stake is held by Doug Gordon, Jon Hilsabeck and Don Jabro of Shellback Capital, with a $48.8 million position; the fund has 4.1% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions comprise Jim Simons’s Renaissance Technologies, Principal Global Investors’s Columbus Circle Investors and Ben Gambill’s Tiger Eye Capital.