Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Ryman Hospitality Properties, Inc. (NYSE:RHP).
Is Ryman Hospitality Properties, Inc. (NYSE:RHP) ready to rally soon? Money managers were turning bullish. The number of long hedge fund positions inched up by 2 in recent months. Ryman Hospitality Properties, Inc. (NYSE:RHP) was in 22 hedge funds’ portfolios at the end of March. The all time high for this statistic is 30. Our calculations also showed that RHP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s view the recent hedge fund action regarding Ryman Hospitality Properties, Inc. (NYSE:RHP).
Do Hedge Funds Think RHP Is A Good Stock To Buy Now?
At first quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the fourth quarter of 2020. By comparison, 26 hedge funds held shares or bullish call options in RHP a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
The largest stake in Ryman Hospitality Properties, Inc. (NYSE:RHP) was held by GAMCO Investors, which reported holding $114.1 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $76.3 million position. Other investors bullish on the company included Eminence Capital, Royce & Associates, and Capital Growth Management. In terms of the portfolio weights assigned to each position Sonic Capital allocated the biggest weight to Ryman Hospitality Properties, Inc. (NYSE:RHP), around 3.2% of its 13F portfolio. Capital Growth Management is also relatively very bullish on the stock, earmarking 2.12 percent of its 13F equity portfolio to RHP.
As industrywide interest jumped, key money managers were breaking ground themselves. Capital Growth Management, managed by Ken Heebner, established the largest position in Ryman Hospitality Properties, Inc. (NYSE:RHP). Capital Growth Management had $23.3 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also made a $8.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Donald Sussman’s Paloma Partners.
Let’s go over hedge fund activity in other stocks similar to Ryman Hospitality Properties, Inc. (NYSE:RHP). These stocks are Driven Brands Holdings Inc. (NASDAQ:DRVN), Portland General Electric Company (NYSE:POR), PS Business Parks Inc (NYSE:PSB), Chesapeake Energy Corporation (NASDAQ:CHK), Teradata Corporation (NYSE:TDC), John Bean Technologies Corporation (NYSE:JBT), and AdaptHealth Corp. (NASDAQ:AHCO). This group of stocks’ market caps are similar to RHP’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 22.4 hedge funds with bullish positions and the average amount invested in these stocks was $441 million. That figure was $356 million in RHP’s case. Chesapeake Energy Corporation (NASDAQ:CHK) is the most popular stock in this table. On the other hand PS Business Parks Inc (NYSE:PSB) is the least popular one with only 12 bullish hedge fund positions. Ryman Hospitality Properties, Inc. (NYSE:RHP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RHP is 45.7. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately RHP wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); RHP investors were disappointed as the stock returned 1.2% since the end of March (through 7/16) 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.
Follow Ryman Hospitality Properties Inc. (NYSE:RHP)
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Disclosure: None. This article was originally published at Insider Monkey.