Is Ryanair Holdings plc (RYAAY) Going to Burn These Hedge Funds?

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Ryanair Holdings plc (NASDAQ:RYAAY) based on that data.

Ryanair Holdings plc (NASDAQ:RYAAY) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 22 hedge funds’ portfolios at the end of the first quarter of 2020. At the end of this article we will also compare RYAAY to other stocks including Arch Capital Group Ltd. (NASDAQ:ACGL), LINE Corporation (NYSE:LN), and Credicorp Ltd. (NYSE:BAP) to get a better sense of its popularity.

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

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Crispin Odey of Odey Asset Management Group

We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a glance at the latest hedge fund action regarding Ryanair Holdings plc (NASDAQ:RYAAY).

What have hedge funds been doing with Ryanair Holdings plc (NASDAQ:RYAAY)?

At Q1’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RYAAY over the last 18 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.

More specifically, Renaissance Technologies was the largest shareholder of Ryanair Holdings plc (NASDAQ:RYAAY), with a stake worth $175.3 million reported as of the end of September. Trailing Renaissance Technologies was Immersion Capital, which amassed a stake valued at $115.9 million. Polaris Capital Management, Woodson Capital Management, and Hosking Partners 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 Teewinot Capital Advisers allocated the biggest weight to Ryanair Holdings plc (NASDAQ:RYAAY), around 16.16% of its 13F portfolio. Immersion Capital is also relatively very bullish on the stock, earmarking 15.81 percent of its 13F equity portfolio to RYAAY.

Since Ryanair Holdings plc (NASDAQ:RYAAY) has witnessed declining sentiment from the smart money, it’s safe to say that there was a specific group of hedgies that elected to cut their entire stakes by the end of the first quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, valued at an estimated $14.7 million in stock, and Andy Redleaf’s Whitebox Advisors was right behind this move, as the fund dropped about $3.6 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Ryanair Holdings plc (NASDAQ:RYAAY) but similarly valued. We will take a look at Arch Capital Group Ltd. (NASDAQ:ACGL), LINE Corporation (NYSE:LN), Credicorp Ltd. (NYSE:BAP), and Waters Corporation (NYSE:WAT). This group of stocks’ market caps are similar to RYAAY’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ACGL 33 733577 10
LN 7 59060 -6
BAP 22 193610 0
WAT 25 337327 -2
Average 21.75 330894 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $331 million. That figure was $551 million in RYAAY’s case. Arch Capital Group Ltd. (NASDAQ:ACGL) is the most popular stock in this table. On the other hand LINE Corporation (NYSE:LN) is the least popular one with only 7 bullish hedge fund positions. Ryanair Holdings plc (NASDAQ:RYAAY) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on RYAAY as the stock returned 42.2% in Q2 (through June 10th) 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.