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Marriott Vacations Worldwide Corporation (VAC): Are Hedge Funds Right About This Stock?

After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Marriott Vacations Worldwide Corporation (NYSE:VAC).

Marriott Vacations Worldwide Corporation (NYSE:VAC) was in 32 hedge funds’ portfolios at the end of the third quarter of 2018. VAC shareholders have witnessed an increase in enthusiasm from smart money recently. There were 20 hedge funds in our database with VAC positions at the end of the previous quarter. Our calculations also showed that VAC isn’t among the 30 most popular stocks among hedge funds.

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 has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

CITADEL INVESTMENT GROUP

Let’s review the recent hedge fund action surrounding Marriott Vacations Worldwide Corporation (NYSE:VAC).

How have hedgies been trading Marriott Vacations Worldwide Corporation (NYSE:VAC)?

Heading into the fourth quarter of 2018, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 60% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in VAC at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

VAC_dec2018

More specifically, Scopus Asset Management was the largest shareholder of Marriott Vacations Worldwide Corporation (NYSE:VAC), with a stake worth $134.1 million reported as of the end of September. Trailing Scopus Asset Management was Citadel Investment Group, which amassed a stake valued at $76.2 million. Rima Senvest Management, Millennium Management, and Scopus Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.

With a general bullishness amongst the heavyweights, key money managers have jumped into Marriott Vacations Worldwide Corporation (NYSE:VAC) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the largest position in Marriott Vacations Worldwide Corporation (NYSE:VAC). Marshall Wace LLP had $37.1 million invested in the company at the end of the quarter. Scott Bessent’s Key Square Capital Management also made a $33.5 million investment in the stock during the quarter. The other funds with brand new VAC positions are Glenn Russell Dubin’s Highbridge Capital Management, Steve Cohen’s Point72 Asset Management, and Josh Donfeld and David Rogers’s Castle Hook Partners.

Let’s check out hedge fund activity in other stocks similar to Marriott Vacations Worldwide Corporation (NYSE:VAC). These stocks are AECOM (NYSE:ACM), The Hanover Insurance Group, Inc. (NYSE:THG), Ashland Global Holdings Inc. (NYSE:ASH), and Cypress Semiconductor Corporation (NASDAQ:CY). This group of stocks’ market values are similar to VAC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ACM 18 293664 -1
THG 18 379909 4
ASH 32 1200550 2
CY 24 162263 1
Average 23 509097 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $509 million. That figure was $578 million in VAC’s case. Ashland Global Holdings Inc. (NYSE:ASH) is the most popular stock in this table. On the other hand AECOM (NYSE:ACM) is the least popular one with only 18 bullish hedge fund positions. Marriott Vacations Worldwide Corporation (NYSE:VAC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ASH might be a better candidate to consider a long position.

Disclosure: None. This article was originally published at Insider Monkey.

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