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Should You Buy Travel Stocks Like Tripadvisor Inc (TRIP) And Ctrip.com International, Ltd. (CTRP)? This Skilled Money Manager Is

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HG Vora Capital Management is a New York city-based hedge fund led by its founder Parag Vora. The long/short hedge fund invests in companies with leveraged balance sheets or firms that are undergoing some kind of major change. Its main sectors include such diverse industries as lodging, gaming, real estate, leisure, retail, finance and travel. The fund, whose public equity portfolio was valued at $801.47 million as of March 31, added ten new stocks to that portfolio during the first quarter, while increasing its holdings in three others. As mentioned, many of Vora’s top picks are in the travel sector, and a number of his new purchases were travel-related heading into the second quarter and the approach of summer. We’ll look at those top new travel picks in this article, which are Tripadvisor Inc (NASDAQ:TRIP), Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) and Homeinns Hotel Group (ADR) (NASDAQ:HMIN).

Parag Vora - HG Vora Capital

At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 142% and beating the market by more than 84 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.

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Parag Vora
HG Vora Capital Management

The first new travel stock of Vora’s is a stake in Massachusetts-based travel service company Tripadvisor Inc (NASDAQ:TRIP). Vora purchased 500,000 shares with a value of $41.59 million during the first quarter, with the holding now ranking as the fourth most valuable long position in his public portfolio. Tripadvisor Inc (NASDAQ:TRIP) has been experienced a slow spring on the NASDAQ, with a return of 1.2% year-to-date and is down by 8.5% during the past three months. Tripadvisor has been having a hard time convincing analysts of its worth, having continuously failed to meet analysts’ expectations, with the first quarter of the year being no different. Analysts are putting their hope on Tripadvisor having a good opportunity to reach new markets in Asia-Pacific where the market for online booking is growing. However, there is still cause for concern that the company’s earnings aren’t growing at a fast enough rate to keep with expanding costs, which are eating up revenue. Besides Vora, Ricky Sandler‘s Eminence Capital seems to believe that the travel broker has a turnaround in it, as he opened a new stake of his own, consisting of 2.45 million shares with a value of $203.35 million during the first quarter.

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