Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of trivago N.V. (NASDAQ:TRVG).
Is trivago N.V. (NASDAQ:TRVG) a bargain? Money managers were becoming hopeful. The number of bullish hedge fund positions improved by 1 recently. trivago N.V. (NASDAQ:TRVG) was in 8 hedge funds’ portfolios at the end of September. The all time high for this statistics is 22. Our calculations also showed that TRVG 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Paul Reeder of PAR Capital Management
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 we’re going to check out the recent hedge fund action surrounding trivago N.V. (NASDAQ:TRVG).
How have hedgies been trading trivago N.V. (NASDAQ:TRVG)?
At the end of September, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TRVG over the last 21 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, PAR Capital Management held the most valuable stake in trivago N.V. (NASDAQ:TRVG), which was worth $32.9 million at the end of the third quarter. On the second spot was Altimeter Capital Management which amassed $8.2 million worth of shares. Greenhouse Funds, Two Sigma Advisors, and Caxton Associates LP 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 PAR Capital Management allocated the biggest weight to trivago N.V. (NASDAQ:TRVG), around 1.25% of its 13F portfolio. Greenhouse Funds is also relatively very bullish on the stock, dishing out 1.15 percent of its 13F equity portfolio to TRVG.
Consequently, key hedge funds were leading the bulls’ herd. Renaissance Technologies, assembled the largest position in trivago N.V. (NASDAQ:TRVG). Renaissance Technologies had $0 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as trivago N.V. (NASDAQ:TRVG) but similarly valued. We will take a look at ACCO Brands Corporation (NYSE:ACCO), Summit Hotel Properties Inc (NYSE:INN), Aerie Pharmaceuticals Inc (NASDAQ:AERI), Golden Ocean Group Ltd (NASDAQ:GOGL), CIRCOR International, Inc. (NYSE:CIR), Humanigen, Inc. (NASDAQ:HGEN), and International Money Express, Inc. (NASDAQ:IMXI). This group of stocks’ market values resemble TRVG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACCO | 14 | 25385 | 2 |
| INN | 9 | 8195 | 1 |
| AERI | 15 | 96347 | -8 |
| GOGL | 5 | 65516 | -2 |
| CIR | 9 | 101099 | 0 |
| HGEN | 6 | 109577 | 6 |
| IMXI | 17 | 110061 | 4 |
| Average | 10.7 | 73740 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.7 hedge funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $49 million in TRVG’s case. International Money Express, Inc. (NASDAQ:IMXI) is the most popular stock in this table. On the other hand Golden Ocean Group Ltd (NASDAQ:GOGL) is the least popular one with only 5 bullish hedge fund positions. trivago N.V. (NASDAQ:TRVG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TRVG is 29.4. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on TRVG as the stock returned 44.5% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
