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. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Hyatt Hotels Corporation (NYSE:H).
Hyatt Hotels Corporation (NYSE:H) investors should be aware of a decrease in hedge fund interest in recent months. Hyatt Hotels Corporation (NYSE:H) was in 23 hedge funds’ portfolios at the end of March. The all time high for this statistic is 38. Our calculations also showed that H isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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. With all of this in mind we’re going to take a look at the fresh hedge fund action regarding Hyatt Hotels Corporation (NYSE:H).
Do Hedge Funds Think H Is A Good Stock To Buy Now?
At Q1’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards H over the last 23 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Among these funds, Melvin Capital Management held the most valuable stake in Hyatt Hotels Corporation (NYSE:H), which was worth $287.4 million at the end of the fourth quarter. On the second spot was Southeastern Asset Management which amassed $282.3 million worth of shares. Highside Global Management, Millennium Management, and Citadel Investment Group 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 Highside Global Management allocated the biggest weight to Hyatt Hotels Corporation (NYSE:H), around 8.37% of its 13F portfolio. Southeastern Asset Management is also relatively very bullish on the stock, earmarking 6.04 percent of its 13F equity portfolio to H.
Judging by the fact that Hyatt Hotels Corporation (NYSE:H) has faced falling interest from the smart money, we can see that there were a few hedge funds who were dropping their full holdings in the first quarter. Interestingly, Parag Vora’s HG Vora Capital Management cut the largest stake of all the hedgies followed by Insider Monkey, valued at close to $37.1 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund cut about $33 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds in the first quarter.
Let’s also examine hedge fund activity in other stocks similar to Hyatt Hotels Corporation (NYSE:H). We will take a look at Juniper Networks, Inc. (NYSE:JNPR), Gerdau SA (NYSE:GGB), Huntington Ingalls Industries Inc (NYSE:HII), Santander Consumer USA Holdings Inc (NYSE:SC), Arrow Electronics, Inc. (NYSE:ARW), Lightspeed POS Inc. (NYSE:LSPD), and Berry Global Group Inc (NYSE:BERY). This group of stocks’ market caps match H’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.1 hedge funds with bullish positions and the average amount invested in these stocks was $563 million. That figure was $667 million in H’s case. Berry Global Group Inc (NYSE:BERY) is the most popular stock in this table. On the other hand Gerdau SA (NYSE:GGB) is the least popular one with only 11 bullish hedge fund positions. Hyatt Hotels Corporation (NYSE:H) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for H is 38.5. 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 H wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); H investors were disappointed as the stock returned -8.7% 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.
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Disclosure: None. This article was originally published at Insider Monkey.