Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) investors should be aware of a decrease in enthusiasm from smart money lately.
In the eyes of most investors, hedge funds are viewed as slow, outdated investment vehicles of yesteryear. While there are greater than 8000 funds in operation today, we choose to focus on the elite of this group, about 450 funds. It is estimated that this group controls the majority of the smart money’s total capital, and by tracking their top picks, we have revealed a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as integral, positive insider trading activity is another way to break down the marketplace. As the old adage goes: there are lots of incentives for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the impressive potential of this method if shareholders understand what to do (learn more here).
Keeping this in mind, let’s take a look at the latest action encompassing Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP).
What have hedge funds been doing with Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)?
At the end of the first quarter, a total of 23 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially.
Of the funds we track, Matt Sirovich and Jeremy Mindich’s Scopia Capital had the largest position in Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), worth close to $116.5 million, comprising 4% of its total 13F portfolio. Coming in second is David Blood and Al Gore of Generation Investment Management, with a $97 million position; 2% of its 13F portfolio is allocated to the company. Other peers that are bullish include Glenn Russell Dubin’s Highbridge Capital Management, Lei Zhang’s Hillhouse Capital Management and Daniel S. Och’s OZ Management.
Seeing as Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there is a sect of hedge funds who sold off their full holdings heading into Q2. It’s worth mentioning that J Kevin Kenny Jr’s Emerging Sovereign Group sold off the largest investment of all the hedgies we key on, comprising close to $69.8 million in stock.. Andreas Halvorsen’s fund, Viking Global, also cut its stock, about $37.8 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)?
Insider buying is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the last half-year time frame, Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity 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 belong to the lodging industry and their market caps resemble CTRP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Orient-Express Hotels Ltd. (NYSE:OEH) | 19 | 0 | 0 |
| Hyatt Hotels Corporation (NYSE:H) | 17 | 0 | 3 |
| Home Inns & Hotels Management Inc. (ADR) (NASDAQ:HMIN) | 10 | 0 | 0 |
| Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) | 25 | 0 | 5 |
| Choice Hotels International, Inc. (NYSE:CHH) | 7 | 0 | 4 |
With the results shown by our studies, retail investors should always pay attention to hedge fund and insider trading sentiment, and Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) shareholders fit into this picture quite nicely.
