Is Expedia Group Inc (NASDAQ:EXPE) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is EXPE a good stock to buy now? Expedia Group Inc (NASDAQ:EXPE) has experienced an increase in activity from the world’s largest hedge funds lately. Expedia Group Inc (NASDAQ:EXPE) was in 64 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 73. There were 61 hedge funds in our database with EXPE holdings at the end of June. Our calculations also showed that EXPE 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are perceived as unimportant, old financial vehicles of yesteryear. While there are over 8000 funds in operation at the moment, Our researchers choose to focus on the bigwigs of this group, around 850 funds. These investment experts administer bulk of the smart money’s total asset base, and by paying attention to their finest picks, Insider Monkey has figured out several investment strategies that have historically outstripped the market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 website. Keeping this in mind we’re going to take a glance at the recent hedge fund action encompassing Expedia Group Inc (NASDAQ:EXPE).
What does smart money think about Expedia Group Inc (NASDAQ:EXPE)?
At the end of the third quarter, a total of 64 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from the second quarter of 2020. On the other hand, there were a total of 37 hedge funds with a bullish position in EXPE a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Melvin Capital Management held the most valuable stake in Expedia Group Inc (NASDAQ:EXPE), which was worth $938.7 million at the end of the third quarter. On the second spot was D1 Capital Partners which amassed $849.8 million worth of shares. Altimeter Capital Management, Melvin Capital Management, and PAR 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 Clearfield Capital allocated the biggest weight to Expedia Group Inc (NASDAQ:EXPE), around 14.16% of its 13F portfolio. PAR Capital Management is also relatively very bullish on the stock, setting aside 8.77 percent of its 13F equity portfolio to EXPE.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Third Point, managed by Dan Loeb, assembled the most outsized position in Expedia Group Inc (NASDAQ:EXPE). Third Point had $149 million invested in the company at the end of the quarter. Josh Resnick’s Jericho Capital Asset Management also initiated a $113 million position during the quarter. The other funds with brand new EXPE positions are John Smith Clark’s Southpoint Capital Advisors, Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management, and John Khoury’s Long Pond Capital.
Let’s also examine hedge fund activity in other stocks similar to Expedia Group Inc (NASDAQ:EXPE). These stocks are PPD, Inc. (NASDAQ:PPD), Alliant Energy Corporation (NYSE:LNT), Huazhu Group Limited (NASDAQ:HTHT), Brown & Brown, Inc. (NYSE:BRO), Godaddy Inc (NYSE:GDDY), FactSet Research Systems Inc. (NYSE:FDS), and Celanese Corporation (NYSE:CE). All of these stocks’ market caps match EXPE’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 30.3 hedge funds with bullish positions and the average amount invested in these stocks was $858 million. That figure was $3788 million in EXPE’s case. Godaddy Inc (NYSE:GDDY) is the most popular stock in this table. On the other hand Huazhu Group Limited (NASDAQ:HTHT) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Expedia Group Inc (NASDAQ:EXPE) is more popular among hedge funds. Our overall hedge fund sentiment score for EXPE is 84.3. 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 returned 31.6% in 2020 through December 2nd but still managed to beat the market by 16 percentage points. Hedge funds were also right about betting on EXPE as the stock returned 39.5% since the end of September (through 12/2) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.