3. Hilton Worldwide Holdings Inc. (NYSE:HLT)
Number of Hedge Fund Holders: 60
Hilton Worldwide Holdings Inc. (NYSE:HLT) is an American hospitality company that owns, leases, manages, and franchises hotels and resorts. Hilton Worldwide Holdings Inc. (NYSE:HLT) also provides cruise travel to its customers. On September 19, the company revealed that it had signed an agreement to develop living facilities for astronauts aboard the Voyager Starlab.
On September 15, Berenberg analyst Stuart Gordon upgraded Hilton Worldwide Holdings Inc. (NYSE:HLT) to Buy from Hold with a price target of $152, up from $140. The analyst said the rapid recovery in lodging has yet to be factored into the shares. He now has Buy ratings on all hotel operators under his coverage.
Among the hedge funds tracked by Insider Monkey, Hilton Worldwide Holdings Inc. (NYSE:HLT) was part of 60 public stock portfolios at the end of June 2022, compared to 52 funds in the prior quarter. Bill Ackman’s Pershing Square is the leading stakeholder of the company, with 9.90 million shares worth $1.10 billion.
Here is what Pershing Square Holdings specifically said about Hilton Worldwide Holdings Inc. (NYSE:HLT) in its Q2 2022 investor letter:
“Hilton Worldwide Holdings Inc. (NYSE:HLT) is a high-quality, asset-light, high-margin business with significant long-term growth potential, led by a superb management team. The unforeseen arrival of the COVID-19 pandemic catalyzed a rapid and near-complete standstill in global travel, with RevPAR (the industry metric for same-store sales at a given hotel) down roughly 90% at the nadir of the pandemic. We increased our investment in Hilton during the pandemic as we believed the economic dislocation from COVID-19 would prove to be transient and that industry projections regarding the timeline for recovery were too pessimistic.
From the moment the pandemic began, Hilton’s management team took decisive actions to ensure the company not only managed through what it knew would be a challenging period, but also positioned the company to generate improved margins, cash flows, and investment returns once the business recovered. In hindsight, Hilton’s experience with COVID-19 – the 100-year proverbial flood – affirmed the company’s unique high-quality, asset light, high-margin business model, and reinforced our belief that Hilton deserves a premium valuation.
While Hilton entered 2022 impacted by the Omicron variant, results have vastly improved throughout the year as COVID-19 has evolved towards a more endemic virus, and consumer behavior has adapted accordingly. In recent months, Hilton’s system-wide RevPAR has surpassed 2019 levels and continues to improve. Recent strength has been led by domestic leisure travel occasions as consumer spending continues to shift from goods to services. …” (Click here to read the full text)
