Is Interval Leisure Group, Inc. (IILG) A Good Stock To Buy?

Before we spend many hours researching a company, we’d like to analyze what hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last 12 months ending in October 30. Sixty three percent of these 30 stocks outperformed the market. Although the elite funds occasionally have their duds, such as Micron and Anadarko Petroleum, which fell 50% and 26%, respectively during the same time period, the hedge fund picks seem to work on average. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Interval Leisure Group, Inc. (NASDAQ:IILG).

Interval Leisure Group, Inc. (NASDAQ:IILG) was in 14 hedge funds’ portfolios at the end of the third quarter of 2015. Interval Leisure Group, Inc. (NASDAQ:IILG) has seen a decrease in hedge fund interest in recent months. There were 17 hedge funds in our database with Interval Leisure Group, Inc. (NASDAQ:IILG) positions at the end of the previous quarter. Adding to a bearish hedge fund sentiment was a similar market response, as the shares of the company lost 19.65% value during the third quarter. In order to understand the hedge fund behavior towards Interval Leisure Group, Inc. (NASDAQ:IILG), we will discuss hedge funds that maintained stakes in the company, at the end of September.

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 California Water Service Group (NYSE:CWT), Sibanye Gold Ltd (ADR) (NYSE:SBGL), and Renren Inc (NYSE:RENN) to gather more data points.

Today, there are a large number of tools market participants employ to value stocks. Two of the best tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the elite fund managers can trounce the S&P 500 by a significant amount (see the details here).

Now, let’s take a look at the fresh action encompassing Interval Leisure Group, Inc. (NASDAQ:IILG).

How have hedgies been trading Interval Leisure Group, Inc. (NASDAQ:IILG)?

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 18% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Wallace R. Weitz & Co., managed by Wallace Weitz, holds the most valuable position in Interval Leisure Group, Inc. (NASDAQ:IILG). Wallace R. Weitz & Co. has a $55.2 million position in the stock, comprising 1.7% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $5.7 million position; less than 0.1% of its 13F portfolio is allocated to the company. Remaining professional money managers that hold long positions comprise Joel Greenblatt’s Gotham Asset Management, D E Shaw, and Roger Ibbotson’s Zebra Capital Management.

Because Interval Leisure Group, Inc. (NASDAQ:IILG) has faced a bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of money managers that decided to sell off their full holdings by the end of the third quarter. Interestingly, Robert B. Gillam’s McKinley Capital Management dumped the biggest investment of the “upper crust” of funds monitored by Insider Monkey, comprising close to $4.2 million in stock. Neil Chriss’ fund, Hutchin Hill Capital, also said goodbye to its stock, about $0.7 million worth of shares. These moves are interesting, as total hedge fund interest was cut by 3 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Interval Leisure Group, Inc. (NASDAQ:IILG) but similarly valued. We will take a look at California Water Service Group (NYSE:CWT), Sibanye Gold Ltd (ADR) (NYSE:SBGL), Renren Inc (NYSE:RENN), and TerraForm Global Inc (NASDAQ:GLBL). This group of stocks’ market values match Interval Leisure Group, Inc. (NASDAQ:IILG)’s market value.

As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $70 million in Interval Leisure Group, Inc. (NASDAQ:IILG)’s case. TerraForm Global Inc (NASDAQ:GLBL) is the most popular stock in this table. On the other hand, Renren Inc (NYSE:RENN) is the least popular one with only 6 bullish hedge fund positions. Interval Leisure Group, Inc. (NASDAQ:IILG) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, TerraForm Global Inc (NASDAQ:GLBL) might be a better candidate to consider a long position.