The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Viad Corp (NYSE:VVI).
Is VVI a good stock to buy now? Hedge fund interest in Viad Corp (NYSE:VVI) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that VVI 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). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as UroGen Pharma Ltd. (NASDAQ:URGN), Lands’ End, Inc. (NASDAQ:LE), and Sabine Royalty Trust (NYSE:SBR) to gather more data points.
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.
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. Keeping this in mind we’re going to review the recent hedge fund action surrounding Viad Corp (NYSE:VVI).
Do Hedge Funds Think VVI Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VVI 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, East Side Capital (RR Partners) held the most valuable stake in Viad Corp (NYSE:VVI), which was worth $15.2 million at the end of the third quarter. On the second spot was Cannell Capital which amassed $13 million worth of shares. Moab Capital Partners, D E Shaw, and Bandera 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 Moab Capital Partners allocated the biggest weight to Viad Corp (NYSE:VVI), around 8.99% of its 13F portfolio. Cannell Capital is also relatively very bullish on the stock, dishing out 4.74 percent of its 13F equity portfolio to VVI.
Because Viad Corp (NYSE:VVI) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of funds that decided to sell off their entire stakes by the end of the third quarter. Interestingly, C. Jonathan Gattman’s Cloverdale Capital Management dumped the biggest stake of all the hedgies watched by Insider Monkey, comprising an estimated $3.8 million in stock. Mark Coe’s fund, Intrinsic Edge Capital, also said goodbye to its stock, about $2.1 million worth. These moves are intriguing to say the least, 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 Viad Corp (NYSE:VVI) but similarly valued. These stocks are UroGen Pharma Ltd. (NASDAQ:URGN), Lands’ End, Inc. (NASDAQ:LE), Sabine Royalty Trust (NYSE:SBR), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP), Viking Therapeutics, Inc. (NASDAQ:VKTX), and Clarus Corporation (NASDAQ:CLAR). This group of stocks’ market caps match VVI’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 10.1 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $65 million in VVI’s case. Lindblad Expeditions Holdings Inc (NASDAQ:LIND) is the most popular stock in this table. On the other hand UroGen Pharma Ltd. (NASDAQ:URGN) is the least popular one with only 4 bullish hedge fund positions. Viad Corp (NYSE:VVI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VVI is 72.3. 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 VVI as the stock returned 55.4% 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.