Smart Money Likes Where Tripadvisor Inc (TRIP) Is Headed

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Tripadvisor Inc (NASDAQ:TRIP) investors should be aware of an increase in enthusiasm from smart money lately. At the end of this article we will also compare TRIP to other stocks including Ingredion Inc (NYSE:INGR), KeyCorp (NYSE:KEY), and Interpublic Group of Companies Inc (NYSE:IPG) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Now, we’re going to go over the new action surrounding Tripadvisor Inc (NASDAQ:TRIP).

What have hedge funds been doing with Tripadvisor Inc (NASDAQ:TRIP)?

Heading into the fourth quarter of 2016, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a gain of 21% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Paul Reeder and Edward Shapiro’s PAR Capital Management has the number one position in Tripadvisor Inc (NASDAQ:TRIP), worth close to $204.6 million, comprising 3% of its total 13F portfolio. The second largest stake is held by Highfields Capital Management, managed by Jonathon Jacobson, which holds a $98.3 million position. Remaining professional money managers that are bullish encompass David Fear’s Thunderbird Partners, David Greenspan’s Slate Path Capital and Michael Sidhom’s Immersion Capital.

Consequently, some big names have jumped into Tripadvisor Inc (NASDAQ:TRIP) headfirst. Thunderbird Partners established the biggest position in Tripadvisor Inc (NASDAQ:TRIP). Thunderbird Partners had $85.7 million invested in the company at the end of the quarter. Immersion Capital also made a $62.7 million investment in the stock during the quarter. The following funds were also among the new TRIP investors: Brian Ashford-Russell and Tim Woolley’s Polar Capital, Daniel S. Och’s OZ Management, and John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s now review hedge fund activity in other stocks similar to Tripadvisor Inc (NASDAQ:TRIP). These stocks are Ingredion Inc (NYSE:INGR), KeyCorp (NYSE:KEY), Interpublic Group of Companies Inc (NYSE:IPG), and Lincoln National Corporation (NYSE:LNC). This group of stocks’ market caps match TRIP’s market cap.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $768 million. That figure was $853 million in TRIP’s case. KeyCorp (NYSE:KEY) is the most popular stock in this table. On the other hand Ingredion Inc (NYSE:INGR) is the least popular one with only 23 bullish hedge fund positions. Tripadvisor Inc (NASDAQ:TRIP) is not the most popular stock in this group but hedge fund interest is still above average and it has more money invested in it than any of the other stocks except IPG. This is a positive signal when coupled with the growing enthusiasm for the stock, so we recommend investors considering adding TRIP to their portfolios.

Disclosure: None