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Do Hedge Funds Love Sabre Corporation (SABR)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Sabre Corporation (NASDAQ:SABR)?

Sabre Corporation (NASDAQ:SABR) has experienced an increase in activity from the world’s largest hedge funds lately. SABR was in 30 hedge funds’ portfolios at the end of March. There were 24 hedge funds in our database with SABR holdings at the end of the previous quarter. Our calculations also showed that SABR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ricky Sandler of Eminence Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this oneWe interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s review the key hedge fund action surrounding Sabre Corporation (NASDAQ:SABR).

What does smart money think about Sabre Corporation (NASDAQ:SABR)?

At the end of the first quarter, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards SABR over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Eminence Capital held the most valuable stake in Sabre Corporation (NASDAQ:SABR), which was worth $23.6 million at the end of the third quarter. On the second spot was SRS Investment Management which amassed $22.6 million worth of shares. D E Shaw, Balyasny Asset Management, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position MIK Capital allocated the biggest weight to Sabre Corporation (NASDAQ:SABR), around 1.19% of its 13F portfolio. Granite Point Capital is also relatively very bullish on the stock, earmarking 0.6 percent of its 13F equity portfolio to SABR.

As industrywide interest jumped, key money managers have been driving this bullishness. Eminence Capital, managed by Ricky Sandler, established the biggest position in Sabre Corporation (NASDAQ:SABR). Eminence Capital had $23.6 million invested in the company at the end of the quarter. Karthik Sarma’s SRS Investment Management also made a $22.6 million investment in the stock during the quarter. The following funds were also among the new SABR investors: Dmitry Balyasny’s Balyasny Asset Management, Kamyar Khajavi’s MIK Capital, and David Harding’s Winton Capital Management.

Let’s also examine hedge fund activity in other stocks similar to Sabre Corporation (NASDAQ:SABR). These stocks are ABM Industries, Inc. (NYSE:ABM), Columbia Financial, Inc. (NASDAQ:CLBK), SPS Commerce, Inc. (NASDAQ:SPSC), and Targa Resources Corp (NYSE:TRGP). This group of stocks’ market caps resemble SABR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ABM 18 46833 6
CLBK 10 41683 -1
SPSC 16 137949 -8
TRGP 29 104380 2
Average 18.25 82711 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $83 million. That figure was $134 million in SABR’s case. Targa Resources Corp (NYSE:TRGP) is the most popular stock in this table. On the other hand Columbia Financial, Inc. (NASDAQ:CLBK) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Sabre Corporation (NASDAQ:SABR) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately SABR wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on SABR were disappointed as the stock returned 17.5% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.