With the fourth-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter of 2021. One of these stocks was Hilton Worldwide Holdings Inc (NYSE:HLT).
Is HLT stock a buy or sell? Hilton Worldwide Holdings Inc (NYSE:HLT) investors should be aware of an increase in support from the world’s most elite money managers lately. Hilton Worldwide Holdings Inc (NYSE:HLT) was in 60 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 57. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that HLT isn’t among the 30 most popular stocks among hedge funds (click for Q4 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 124 percentage points since March 2017 (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article). Now let’s go over the recent hedge fund action regarding Hilton Worldwide Holdings Inc (NYSE:HLT).
Do Hedge Funds Think HLT Is A Good Stock To Buy Now?
At the end of December, a total of 60 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in HLT over the last 22 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Pershing Square held the most valuable stake in Hilton Worldwide Holdings Inc (NYSE:HLT), which was worth $1485.3 million at the end of the fourth quarter. On the second spot was Eagle Capital Management which amassed $974.3 million worth of shares. D1 Capital Partners, Viking Global, and Melvin 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 Pershing Square allocated the biggest weight to Hilton Worldwide Holdings Inc (NYSE:HLT), around 14.85% of its 13F portfolio. Pelham Capital is also relatively very bullish on the stock, setting aside 14.09 percent of its 13F equity portfolio to HLT.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Zimmer Partners, managed by Stuart J. Zimmer, established the biggest position in Hilton Worldwide Holdings Inc (NYSE:HLT). Zimmer Partners had $100.1 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $76.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Gaurav Kapadia’s XN Exponent Advisors, Brennan Diaz’s Fernbridge Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Hilton Worldwide Holdings Inc (NYSE:HLT) but similarly valued. We will take a look at ResMed Inc. (NYSE:RMD), Republic Services, Inc. (NYSE:RSG), QuantumScape Corporation (NYSE:QS), Zillow Group Inc (NASDAQ:Z), LyondellBasell Industries NV (NYSE:LYB), Phillips 66 (NYSE:PSX), and XPeng Inc. (NYSE:XPEV). All of these stocks’ market caps match HLT’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 37.7 hedge funds with bullish positions and the average amount invested in these stocks was $1544 million. That figure was $6029 million in HLT’s case. Zillow Group Inc (NASDAQ:Z) is the most popular stock in this table. On the other hand Phillips 66 (NYSE:PSX) is the least popular one with only 26 bullish hedge fund positions. Hilton Worldwide Holdings Inc (NYSE:HLT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HLT is 67.8. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on HLT as the stock returned 11.8% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.