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Hedge Funds Have Never Been This Bullish On Wyndham Destinations, Inc. (WYND)

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Wyndham Destinations, Inc. (NYSE:WYND) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.

Is Wyndham Destinations, Inc. (NYSE:WYND) an attractive investment now? Prominent investors were taking an optimistic view. The number of long hedge fund positions rose by 9 lately. Wyndham Destinations, Inc. (NYSE:WYND) was in 34 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 31. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that WYND isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Harold Levy Iridian Asset Management

Harold Levy of Iridian Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. Cannabis stocks are roaring back in 2020, which is why we are also checking out this under-the-radar stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 we’re going to take a look at the recent hedge fund action surrounding Wyndham Destinations, Inc. (NYSE:WYND).

What have hedge funds been doing with Wyndham Destinations, Inc. (NYSE:WYND)?

Heading into the third quarter of 2020, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 36% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in WYND over the last 20 quarters. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

More specifically, Iridian Asset Management was the largest shareholder of Wyndham Destinations, Inc. (NYSE:WYND), with a stake worth $126.2 million reported as of the end of September. Trailing Iridian Asset Management was Rima Senvest Management, which amassed a stake valued at $95.1 million. Arrowstreet Capital, Nantahala Capital Management, and AQR 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 Rima Senvest Management allocated the biggest weight to Wyndham Destinations, Inc. (NYSE:WYND), around 5.93% of its 13F portfolio. Solel Partners is also relatively very bullish on the stock, earmarking 4.63 percent of its 13F equity portfolio to WYND.

Consequently, some big names were breaking ground themselves. Tremblant Capital, managed by Brett Barakett, initiated the largest position in Wyndham Destinations, Inc. (NYSE:WYND). Tremblant Capital had $18.3 million invested in the company at the end of the quarter. Craig Peskin and Peter Fleiss’s Solel Partners also made a $12.2 million investment in the stock during the quarter. The following funds were also among the new WYND investors: Michael Kahan and Jeremy Kahan’s North Peak Capital, Ryan Caldwell’s Chiron Investment Management, and Brad Stephens’s Six Columns Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Wyndham Destinations, Inc. (NYSE:WYND) but similarly valued. These stocks are IBERIABANK Corporation (NASDAQ:IBKC), Avient Corporation (NYSE:AVNT), Camping World Holdings, Inc. (NYSE:CWH), Federated Hermes, Inc. (NYSE:FHI), Evercore Inc. (NYSE:EVR), Arco Platform Limited (NASDAQ:ARCE), and ViaSat, Inc. (NASDAQ:VSAT). This group of stocks’ market valuations are closest to WYND’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IBKC 26 201604 -4
AVNT 22 193411 -6
CWH 23 341511 7
FHI 30 167797 2
EVR 25 176532 -4
ARCE 25 183602 9
VSAT 23 1006955 2
Average 24.9 324487 0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.9 hedge funds with bullish positions and the average amount invested in these stocks was $324 million. That figure was $435 million in WYND’s case. Federated Hermes, Inc. (NYSE:FHI) is the most popular stock in this table. On the other hand Avient Corporation (NYSE:AVNT) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Wyndham Destinations, Inc. (NYSE:WYND) is more popular among hedge funds. Our overall hedge fund sentiment score for WYND is 90. 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. 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 33% in 2020 through the end of August and still beat the market by 23.2 percentage points. Unfortunately WYND wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on WYND were disappointed as the stock returned 2.9% since the end of the second quarter 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.