In this article we will take a look at whether hedge funds think Playa Hotels & Resorts N.V. (NASDAQ:PLYA) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Playa Hotels & Resorts N.V. (NASDAQ:PLYA) investors should pay attention to a decrease in support from the world’s most elite money managers recently. Playa Hotels & Resorts N.V. (NASDAQ:PLYA) was in 16 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 25. There were 17 hedge funds in our database with PLYA positions at the end of the second quarter. Our calculations also showed that PLYA 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.
If you’d ask most shareholders, hedge funds are viewed as unimportant, old financial vehicles of years past. While there are greater than 8000 funds with their doors open at the moment, Our researchers look at the moguls of this group, about 850 funds. It is estimated that this group of investors have their hands on bulk of the smart money’s total asset base, and by paying attention to their finest stock picks, Insider Monkey has revealed a few investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat 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 15 best blue chip stocks to pick the best large-cap stocks to buy. 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. With all of this in mind let’s take a gander at the recent hedge fund action encompassing Playa Hotels & Resorts N.V. (NASDAQ:PLYA).
Do Hedge Funds Think PLYA Is A Good Stock To Buy Now?
At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PLYA over the last 21 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Farallon Capital has the most valuable position in Playa Hotels & Resorts N.V. (NASDAQ:PLYA), worth close to $128.2 million, accounting for 0.9% of its total 13F portfolio. Sitting at the No. 2 spot is Parag Vora of HG Vora Capital Management, with a $54.1 million position; 4.1% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish contain Jonathan Kolatch’s Redwood Capital Management, Michael A. Price and Amos Meron’s Empyrean Capital Partners and David Steinberg and Eric Udoff’s Marlowe Partners. In terms of the portfolio weights assigned to each position Marlowe Partners allocated the biggest weight to Playa Hotels & Resorts N.V. (NASDAQ:PLYA), around 6.98% of its 13F portfolio. DG Capital Management is also relatively very bullish on the stock, designating 4.47 percent of its 13F equity portfolio to PLYA.
Seeing as Playa Hotels & Resorts N.V. (NASDAQ:PLYA) has faced falling interest from the smart money, it’s easy to see that there is a sect of fund managers that decided to sell off their positions entirely heading into Q4. Intriguingly, Himanshu Gulati’s Antara Capital dumped the biggest investment of all the hedgies tracked by Insider Monkey, comprising about $0.2 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund dropped about $0.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to Playa Hotels & Resorts N.V. (NASDAQ:PLYA). These stocks are Apogee Enterprises, Inc. (NASDAQ:APOG), Crossamerica Partners LP (NYSE:CAPL), Aurora Cannabis Inc. (NYSE:ACB), FinVolution Group (NYSE:FINV), Ribbon Communications Inc. (NASDAQ:RBBN), Universal Logistics Holdings, Inc. (NASDAQ:ULH), and iHeartMedia, Inc. (NASDAQ:IHRT). All of these stocks’ market caps resemble PLYA’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 9.7 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $260 million in PLYA’s case. iHeartMedia, Inc. (NASDAQ:IHRT) is the most popular stock in this table. On the other hand Crossamerica Partners LP (NYSE:CAPL) is the least popular one with only 1 bullish hedge fund positions. Playa Hotels & Resorts N.V. (NASDAQ:PLYA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PLYA is 60.7. 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. Hedge funds were also right about betting on PLYA as the stock returned 17.9% since the end of Q3 (through 12/14) 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.