Is Hyatt Hotels Corporation (NYSE:H) undervalued? Hedge funds are getting less optimistic. The number of bullish hedge fund bets went down by 6 recently.
If you’d ask most traders, hedge funds are perceived as underperforming, old financial vehicles of the past. While there are more than 8000 funds trading today, we at Insider Monkey hone in on the masters of this group, about 450 funds. It is estimated that this group controls the lion’s share of the smart money’s total asset base, and by keeping an eye on their highest performing stock picks, we have identified a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as key, positive insider trading activity is another way to break down the world of equities. As the old adage goes: there are plenty of stimuli for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this method if piggybackers understand where to look (learn more here).
With these “truths” under our belt, let’s take a look at the latest action regarding Hyatt Hotels Corporation (NYSE:H).
How have hedgies been trading Hyatt Hotels Corporation (NYSE:H)?
Heading into 2013, a total of 14 of the hedge funds we track held long positions in this stock, a change of -30% from one quarter earlier. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Hyatt Hotels Corporation (NYSE:H). Citadel Investment Group has a $27 million position in the stock, comprising 0% of its 13F portfolio. The second largest stake is held by Hayman Advisors, managed by Kyle Bass, which held a $13 million position; the fund has 7.9% of its 13F portfolio invested in the stock. Remaining peers that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, D. E. Shaw’s D E Shaw and Steven Cohen’s SAC Capital Advisors.
Seeing as Hyatt Hotels Corporation (NYSE:H) has witnessed a declination in interest from the smart money, logic holds that there was a specific group of hedgies that elected to cut their entire stakes last quarter. It’s worth mentioning that Roberto Mignone’s Bridger Management sold off the biggest position of the “upper crust” of funds we watch, worth an estimated $52 million in stock., and SAC Subsidiary of Sigma Capital Management was right behind this move, as the fund dumped about $42 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 6 funds last quarter.
How have insiders been trading Hyatt Hotels Corporation (NYSE:H)?
Insider buying is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the last 180-day time frame, Hyatt Hotels Corporation (NYSE:H) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Hyatt Hotels Corporation (NYSE:H). These stocks are Expedia Inc (NASDAQ:EXPE), InterContinental Hotels Group PLC (ADR) (NYSE:IHG), Wyndham Worldwide Corporation (NYSE:WYN), Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT), and Marriott International Inc (NYSE:MAR). All of these stocks are in the lodging industry and their market caps match H’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Expedia Inc (NASDAQ:EXPE)||33||1||4|
|InterContinental Hotels Group PLC (ADR) (NYSE:IHG)||13||0||0|
|Wyndham Worldwide Corporation (NYSE:WYN)||30||0||9|
|Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT)||31||0||12|
|Marriott International Inc (NYSE:MAR)||19||0||12|
With the results demonstrated by the aforementioned research, retail investors must always keep an eye on hedge fund and insider trading activity, and Hyatt Hotels Corporation (NYSE:H) is an important part of this process.
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