It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS).
Controladora Vuela Co Avcn SA CV (ADR) was in 12 hedge funds’ portfolios at the end of the third quarter of 2015. VLRS investors should pay attention to an increase in activity from the world’s largest hedge funds of late. There were 9 hedge funds in our database with VLRS holdings at the end of the previous quarter. At the end of this article we will also compare VLRS to other stocks including Charles River Laboratories (NYSE:CRL), Leidos Holdings Inc (NYSE:LDOS), and EPR Properties (NYSE:EPR) to get a better sense of its popularity.
Now, we’re going to view the key action regarding Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS).
What have hedge funds been doing with Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the second quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, PAR Capital Management, managed by Paul Reeder and Edward Shapiro, holds the biggest position in Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS). PAR Capital Management has a $16.4 million position in the stock, comprising 0.3% of its 13F portfolio. On PAR Capital Management’s heels is Michael Moriarty of Teewinot Capital Advisers, with a $12 million position; 8.5% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions comprise Richard Driehaus’s Driehaus Capital, Robert B. Gillam’s McKinley Capital Management and Rob Citrone’s Discovery Capital Management.