Is EXPC A Good Stock To Buy Now?

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 Experience Investment Corp. (NASDAQ:EXPC).

Is EXPC a good stock to buy now? Money managers were in a bullish mood. The number of long hedge fund bets increased by 6 recently. Experience Investment Corp. (NASDAQ:EXPC) was in 19 hedge funds’ portfolios at the end of September. The all time high for this statistic is 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that EXPC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 13 hedge funds in our database with EXPC holdings at the end of June.

Video: Watch our video about the top 5 most popular hedge fund stocks.

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 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Jeffrey Tannenbaum of Fir Tree

Keeping this in mind we’re going to take a look at the latest hedge fund action regarding Experience Investment Corp. (NASDAQ:EXPC).

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

Heading into the fourth quarter of 2020, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 46% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EXPC over the last 21 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

The largest stake in Experience Investment Corp. (NASDAQ:EXPC) was held by Glazer Capital, which reported holding $24.9 million worth of stock at the end of September. It was followed by Millennium Management with a $19.6 million position. Other investors bullish on the company included Governors Lane, HBK Investments, and Omni Partners. In terms of the portfolio weights assigned to each position Governors Lane allocated the biggest weight to Experience Investment Corp. (NASDAQ:EXPC), around 1.45% of its 13F portfolio. Fort Baker Capital Management is also relatively very bullish on the stock, dishing out 1.42 percent of its 13F equity portfolio to EXPC.

As industrywide interest jumped, specific money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the largest position in Experience Investment Corp. (NASDAQ:EXPC). Marshall Wace LLP had $5 million invested in the company at the end of the quarter. Carl Tiedemann and Michael Tiedemann’s TIG Advisors also made a $0.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Boaz Weinstein’s Saba Capital, Jeffrey Tannenbaum’s Fir Tree, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Experience Investment Corp. (NASDAQ:EXPC) but similarly valued. These stocks are Orchid Island Capital, Inc. (NYSE:ORC), Osmotica Pharmaceuticals plc (NASDAQ:OSMT), HF Foods Group Inc. (NASDAQ:HFFG), Cytosorbents Corp (NASDAQ:CTSO), Bridge Bancorp, Inc. (NASDAQ:BDGE), Crawford & Company (NYSE:CRD), and Vishay Precision Group Inc (NYSE:VPG). This group of stocks’ market valuations are closest to EXPC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ORC 4 11068 0
OSMT 9 20041 -1
HFFG 2 2156 -1
CTSO 13 48671 4
BDGE 12 54568 3
CRD 9 42031 1
VPG 15 91702 -2
Average 9.1 38605 0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.1 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $95 million in EXPC’s case. Vishay Precision Group Inc (NYSE:VPG) is the most popular stock in this table. On the other hand HF Foods Group Inc. (NASDAQ:HFFG) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Experience Investment Corp. (NASDAQ:EXPC) is more popular among hedge funds. Our overall hedge fund sentiment score for EXPC 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Unfortunately EXPC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on EXPC were disappointed as the stock returned 1.8% since the end of the third quarter (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 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.