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 30th, 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 Strategic Hotels and Resorts Inc (NYSE:BEE).
Strategic Hotels and Resorts Inc (NYSE:BEE) was in 31 hedge funds’ portfolios at the end of September. BEE investors should pay attention to an increase in hedge fund sentiment of late. There were 15 hedge funds in our database with BEE positions at the end of the previous quarter. At the end of this article we will also compare BEE to other stocks including Teradyne, Inc. (NYSE:TER), Syntel, Inc. (NASDAQ:SYNT), and Bank Of The Ozarks Inc (NASDAQ:OZRK) to get a better sense of its popularity.
How are hedge funds trading Strategic Hotels and Resorts Inc (NYSE:BEE)?
At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 107% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund holdings data compiled by Insider Monkey, Matthew Halbower’s Pentwater Capital Management has the number one position in Strategic Hotels and Resorts Inc (NYSE:BEE), worth close to $114.8 million, comprising 1% of its total 13F portfolio. Sitting at the No. 2 spot is Water Island Capital, managed by John Orrico, which held a $50.6 million position; 2.6% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Neil Chriss’s Hutchin Hill Capital, Shane Finemore’s Manikay Partners and Robert Emil Zoellner’s Alpine Associates.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Pentwater Capital Management established the biggest position in Strategic Hotels and Resorts Inc (NYSE:BEE). Pentwater Capital Management had $114.8 million invested in the company at the end of the quarter. Water Island Capital’s $50.6 million position is also a new one. The other funds with brand new BEE positions are Neil Chriss’s Hutchin Hill Capital, Shane Finemore’s Manikay Partners, and Robert Emil Zoellner’s Alpine Associates.
Let’s also review hedge fund activity in other stocks similar to Strategic Hotels and Resorts Inc (NYSE:BEE). We will take a look at Teradyne, Inc. (NYSE:TER), Syntel, Inc. (NASDAQ:SYNT), Bank Of The Ozarks Inc (NASDAQ:OZRK), and Dun & Bradstreet Corp (NYSE:DNB). All of these stocks’ market caps are similar to BEE’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $241 million. Teradyne, Inc. (NYSE:TER) is the most popular stock in this table. On the other hand Bank Of The Ozarks Inc (NASDAQ:OZRK) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Strategic Hotels and Resorts Inc (NYSE:BEE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.