Hedge Funds Are Dumping Spirit Airlines Incorporated (SAVE)

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. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Spirit Airlines Incorporated (NASDAQ:SAVE).

Spirit Airlines Incorporated (NASDAQ:SAVE) investors should be aware of a decrease in hedge fund sentiment in recent months. Spirit Airlines Incorporated (NASDAQ:SAVE) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 39. There were 29 hedge funds in our database with SAVE positions at the end of the second quarter. Our calculations also showed that SAVE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to view the new hedge fund action surrounding Spirit Airlines Incorporated (NASDAQ:SAVE).

Do Hedge Funds Think SAVE Is A Good Stock To Buy Now?

At the end of September, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -28% from the second quarter of 2021. By comparison, 27 hedge funds held shares or bullish call options in SAVE a year ago. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

More specifically, PAR Capital Management was the largest shareholder of Spirit Airlines Incorporated (NASDAQ:SAVE), with a stake worth $33.7 million reported as of the end of September. Trailing PAR Capital Management was Two Sigma Advisors, which amassed a stake valued at $31 million. Point72 Asset Management, Citadel Investment Group, and Millennium Management 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 Sonic Capital allocated the biggest weight to Spirit Airlines Incorporated (NASDAQ:SAVE), around 4.4% of its 13F portfolio. PAR Capital Management is also relatively very bullish on the stock, designating 0.81 percent of its 13F equity portfolio to SAVE.

Judging by the fact that Spirit Airlines Incorporated (NASDAQ:SAVE) has witnessed a decline in interest from the smart money, it’s easy to see that there exists a select few hedge funds that slashed their positions entirely heading into Q4. Intriguingly, Renaissance Technologies said goodbye to the biggest position of the 750 funds watched by Insider Monkey, totaling close to $16 million in stock, and Richard Driehaus’s Driehaus Capital was right behind this move, as the fund dumped about $15.1 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 8 funds heading into Q4.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Spirit Airlines Incorporated (NASDAQ:SAVE) but similarly valued. These stocks are Old National Bancorp (NYSE:ONB), Prestige Consumer Healthcare Inc. (NYSE:PBH), Editas Medicine, Inc. (NASDAQ:EDIT), Accolade, Inc. (NASDAQ:ACCD), LendingClub Corp (NYSE:LC), Commscope Holding Company Inc (NASDAQ:COMM), and Cardlytics, Inc. (NASDAQ:CDLX). All of these stocks’ market caps are closest to SAVE’s market cap.

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As you can see these stocks had an average of 23.6 hedge funds with bullish positions and the average amount invested in these stocks was $424 million. That figure was $169 million in SAVE’s case. Commscope Holding Company Inc (NASDAQ:COMM) is the most popular stock in this table. On the other hand Old National Bancorp (NYSE:ONB) is the least popular one with only 12 bullish hedge fund positions. Spirit Airlines Incorporated (NASDAQ:SAVE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SAVE is 31.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and surpassed the market again by 3.6 percentage points. Unfortunately SAVE wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); SAVE investors were disappointed as the stock returned -15.8% since the end of September (through 12/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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

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