Is Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) a buy?
To the average investor, there are dozens of metrics market participants can use to track stocks. A couple of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can outperform the broader indices by a superb margin (see just how much).
Equally as useful, positive insider trading sentiment is a second way to analyze the stock market universe. Just as you'd expect, there are many reasons for a corporate insider to downsize shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the valuable potential of this method if shareholders know where to look (learn more here).
What's more, let's examine the latest info about Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP).
At the end of the second quarter, a total of 26 of the hedge funds we track held long positions in this stock, a change of 13% from the previous quarter. With hedge funds' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes meaningfully.
According to our 13F database, Matt Sirovich and Jeremy Mindich's Scopia Capital had the biggest position in Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), worth close to $134.6 million, accounting for 3.8% of its total 13F portfolio. Sitting at the No. 2 spot is Hillhouse Capital Management, managed by Lei Zhang, which held a $122.5 million position; the fund has 18.8% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Glenn Russell Dubin's Highbridge Capital Management, Bain Capital's Brookside Capital and David Blood and Al Gore's Generation Investment Management.
As industrywide interest increased, certain bigger names have been driving this bullishness. Scopia Capital, managed by Matt Sirovich and Jeremy Mindich, established the largest position in Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP). Scopia Capital had 134.6 million invested in the company at the end of the quarter. Lei Zhang's Hillhouse Capital Management also made a $122.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Glenn Russell Dubin's Highbridge Capital Management, Bain Capital's Brookside Capital, and David Blood and Al Gore's Generation Investment Management.
Insider buying made by high-level executives is particularly usable when the company we're looking at has experienced transactions within the past 180 days. Over the last six-month time frame, Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP). These stocks are Orient-Express Hotels Ltd. (NYSE:OEH), Hyatt Hotels Corporation (NYSE:H), Home Inns & Hotels Management Inc. (ADR) (NASDAQ:HMIN), Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP), and Choice Hotels International, Inc. (NYSE:CHH). This group of stocks are the members of the lodging industry and their market caps are closest to CTRP's market cap.