Hedge Funds Are Piling Into Huazhu Group Limited (HTHT)

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Huazhu Group Limited (NASDAQ:HTHT).

Huazhu Group Limited (NASDAQ:HTHT) was in 28 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 27. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. HTHT shareholders have witnessed an increase in hedge fund interest in recent months. There were 27 hedge funds in our database with HTHT holdings at the end of June. Our calculations also showed that HTHT isn’t among the 30 most popular stocks among hedge funds (click for Q3 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. With all of this in mind let’s check out the new hedge fund action encompassing Huazhu Group Limited (NASDAQ:HTHT).

David Blood

David Blood of Generation Investment Management

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

Heading into the fourth quarter of 2021, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the previous quarter. By comparison, 21 hedge funds held shares or bullish call options in HTHT a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Generation Investment Management held the most valuable stake in Huazhu Group Limited (NASDAQ:HTHT), which was worth $313.8 million at the end of the third quarter. On the second spot was Yiheng Capital which amassed $140.8 million worth of shares. Platinum Asset Management, Cartica Management, and Hillhouse Capital 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 One01 Capital allocated the biggest weight to Huazhu Group Limited (NASDAQ:HTHT), around 7.22% of its 13F portfolio. Yiheng Capital is also relatively very bullish on the stock, earmarking 6.93 percent of its 13F equity portfolio to HTHT.

As aggregate interest increased, some big names were breaking ground themselves. Cartica Management, managed by Teresa Barger, established the most valuable position in Huazhu Group Limited (NASDAQ:HTHT). Cartica Management had $30.7 million invested in the company at the end of the quarter. James Chen’s Ovata Capital Management also initiated a $15 million position during the quarter. The following funds were also among the new HTHT investors: James Dinan’s York Capital Management, Joseph Samuels’s Islet Management, and Jacob Mitchell’s Antipodes Partners.

Let’s now take a look at hedge fund activity in other stocks similar to Huazhu Group Limited (NASDAQ:HTHT). These stocks are Camden Property Trust (NYSE:CPT), LKQ Corporation (NASDAQ:LKQ), ABIOMED, Inc. (NASDAQ:ABMD), KANZHUN LIMITED (NASDAQ:BZ), NortonLifeLock Inc. (NASDAQ:NLOK), Plug Power, Inc. (NASDAQ:PLUG), and CenterPoint Energy, Inc. (NYSE:CNP). This group of stocks’ market valuations match HTHT’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CPT 23 419856 2
LKQ 38 1694705 3
ABMD 25 921097 1
BZ 18 1170974 -8
NLOK 34 1296792 -2
PLUG 20 360413 -14
CNP 14 134303 -6
Average 24.6 856877 -3.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.6 hedge funds with bullish positions and the average amount invested in these stocks was $857 million. That figure was $776 million in HTHT’s case. LKQ Corporation (NASDAQ:LKQ) is the most popular stock in this table. On the other hand CenterPoint Energy, Inc. (NYSE:CNP) is the least popular one with only 14 bullish hedge fund positions. Huazhu Group Limited (NASDAQ:HTHT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HTHT is 65.2. 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 positive signal but 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately HTHT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HTHT were disappointed as the stock returned -14% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.

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