Hedge Funds Are Souring On Hilton Worldwide Holdings Inc (HLT)

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 Hilton Worldwide Holdings Inc (NYSE:HLT).

Is Hilton Worldwide Holdings Inc (NYSE:HLT) the right pick for your portfolio? Investors who are in the know were reducing their bets on the stock. The number of long hedge fund positions decreased by 1 recently. Hilton Worldwide Holdings Inc (NYSE:HLT) was in 44 hedge funds’ portfolios at the end of September. The all time high for this statistic is 60. Our calculations also showed that HLT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 45 hedge funds in our database with HLT holdings at the end of June.


Boykin Curry of Eagle Capital

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 let’s check out the fresh hedge fund action encompassing Hilton Worldwide Holdings Inc (NYSE:HLT).

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

At Q3’s end, a total of 44 of the hedge funds tracked by Insider Monkey were long this stock, a change of -2% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HLT over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

Is HLT A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Pershing Square, managed by Bill Ackman, holds the largest position in Hilton Worldwide Holdings Inc (NYSE:HLT). Pershing Square has a $1.7023 billion position in the stock, comprising 18% of its 13F portfolio. Sitting at the No. 2 spot is Eagle Capital Management, managed by Boykin Curry, which holds a $1.0008 billion position; 2.9% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors with similar optimism contain Gabriel Plotkin’s Melvin Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Gabriel Plotkin’s Melvin Capital Management. In terms of the portfolio weights assigned to each position Pershing Square allocated the biggest weight to Hilton Worldwide Holdings Inc (NYSE:HLT), around 17.99% of its 13F portfolio. Tiger Eye Capital is also relatively very bullish on the stock, earmarking 9.29 percent of its 13F equity portfolio to HLT.

Judging by the fact that Hilton Worldwide Holdings Inc (NYSE:HLT) has witnessed a decline in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds that decided to sell off their full holdings heading into Q4. It’s worth mentioning that Gaurav Kapadia’s XN Exponent Advisors cut the biggest position of the 750 funds tracked by Insider Monkey, valued at about $66.9 million in stock. John Khoury’s fund, Long Pond Capital, also dumped its stock, about $51.9 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 1 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Hilton Worldwide Holdings Inc (NYSE:HLT) but similarly valued. These stocks are Discover Financial Services (NYSE:DFS), Okta, Inc. (NASDAQ:OKTA), Zscaler, Inc. (NASDAQ:ZS), Centene Corporation (NYSE:CNC), CRH PLC (NYSE:CRH), General Mills, Inc. (NYSE:GIS), and SBA Communications Corporation (NASDAQ:SBAC). This group of stocks’ market caps match HLT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DFS 37 516149 0
OKTA 62 2262165 5
ZS 38 1624343 0
CNC 50 2431144 1
CRH 7 83127 -2
GIS 32 731647 -5
SBAC 36 1893871 -7
Average 37.4 1363207 -1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.4 hedge funds with bullish positions and the average amount invested in these stocks was $1363 million. That figure was $5364 million in HLT’s case. Okta, Inc. (NASDAQ:OKTA) is the most popular stock in this table. On the other hand CRH PLC (NYSE:CRH) is the least popular one with only 7 bullish hedge fund positions. Hilton Worldwide Holdings Inc (NYSE:HLT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HLT is 59.6. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately HLT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HLT were disappointed as the stock returned 2.2% since the end of September (through 11/30) 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.