Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Marriott International Inc (NYSE:MAR) to find out whether there were any major changes in hedge funds’ views.
Is Marriott (MAR) a good stock to buy now? MAR has experienced an increase in support from the world’s most elite money managers in recent months. Marriott International Inc (NYSE:MAR) was in 56 hedge funds’ portfolios at the end of September. The all time high for this statistics is 48. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 48 hedge funds in our database with MAR positions at the end of the second quarter. Our calculations also showed that MAR 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.
At the moment there are a lot of metrics shareholders use to analyze their holdings. Some of the most under-the-radar metrics are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the elite investment managers can beat the S&P 500 by a significant amount (see the details here).
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Hedge fund activity in Marriott International Inc (NYSE:MAR)
Heading into the fourth quarter of 2020, a total of 56 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MAR over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Eagle Capital Management held the most valuable stake in Marriott International Inc (NYSE:MAR), which was worth $1217.5 million at the end of the third quarter. On the second spot was Ako Capital which amassed $198.3 million worth of shares. Soroban Capital Partners, First Pacific Advisors LLC, and Crake Asset 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 BlueDrive Global Investors allocated the biggest weight to Marriott International Inc (NYSE:MAR), around 9.1% of its 13F portfolio. Broad Peak Investment Holdings is also relatively very bullish on the stock, dishing out 5.78 percent of its 13F equity portfolio to MAR.
With a general bullishness amongst the heavyweights, specific money managers have jumped into Marriott International Inc (NYSE:MAR) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, created the biggest position in Marriott International Inc (NYSE:MAR). Balyasny Asset Management had $35.8 million invested in the company at the end of the quarter. Emanuel J. Friedman’s EJF Capital also initiated a $27.5 million position during the quarter. The following funds were also among the new MAR investors: Kenneth Tropin’s Graham Capital Management, Matthew Halbower’s Pentwater Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Marriott International Inc (NYSE:MAR) but similarly valued. These stocks are MSCI Inc (NYSE:MSCI), The Hershey Company (NYSE:HSY), Republic Services, Inc. (NYSE:RSG), Cadence Design Systems Inc (NASDAQ:CDNS), Brown-Forman Corporation (NYSE:BF), PACCAR Inc (NASDAQ:PCAR), and The Allstate Corporation (NYSE:ALL). This group of stocks’ market caps match MAR’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 38.3 hedge funds with bullish positions and the average amount invested in these stocks was $939 million. That figure was $2334 million in MAR’s case. MSCI Inc (NYSE:MSCI) is the most popular stock in this table. On the other hand Brown-Forman Corporation (NYSE:BF) is the least popular one with only 32 bullish hedge fund positions. Compared to these stocks Marriott International Inc (NYSE:MAR) is more popular among hedge funds. Our overall hedge fund sentiment score for MAR 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 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 MAR as the stock returned 39% 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.
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Disclosure: None. This article was originally published at Insider Monkey.