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 Hyatt Hotels Corporation (NYSE:H).
Is H stock a buy? Hyatt Hotels Corporation (NYSE:H) was in 27 hedge funds' portfolios at the end of December. The all time high for this statistic is 38. H has experienced an increase in enthusiasm from smart money recently. There were 26 hedge funds in our database with H positions at the end of the third quarter. Our calculations also showed that H isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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. Hedge funds have more than $3 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Parag Vora of HG Vora Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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. Now we're going to analyze the recent hedge fund action regarding Hyatt Hotels Corporation (NYSE:H).
Do Hedge Funds Think H Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the third quarter of 2020. On the other hand, there were a total of 27 hedge funds with a bullish position in H a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Southeastern Asset Management was the largest shareholder of Hyatt Hotels Corporation (NYSE:H), with a stake worth $305.4 million reported as of the end of December. Trailing Southeastern Asset Management was Melvin Capital Management, which amassed a stake valued at $261.7 million. Citadel Investment Group, HG Vora Capital Management, and Balyasny Asset Management 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 Highside Global Management allocated the biggest weight to Hyatt Hotels Corporation (NYSE:H), around 7.4% of its 13F portfolio. Southeastern Asset Management is also relatively very bullish on the stock, dishing out 6.82 percent of its 13F equity portfolio to H.
As aggregate interest increased, some big names have been driving this bullishness. HG Vora Capital Management, managed by Parag Vora, established the biggest position in Hyatt Hotels Corporation (NYSE:H). HG Vora Capital Management had $37.1 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also made a $33 million investment in the stock during the quarter. The other funds with new positions in the stock are Chuck Royce's Royce & Associates, Paul Marshall and Ian Wace's Marshall Wace LLP, and Greg Eisner's Engineers Gate Manager.
Let's now take a look at hedge fund activity in other stocks similar to Hyatt Hotels Corporation (NYSE:H). These stocks are AECOM (NYSE:ACM), Berry Global Group Inc (NYSE:BERY), Nielsen Holdings plc (NYSE:NLSN), Kodiak Sciences Inc (NASDAQ:KOD), Voya Financial Inc (NYSE:VOYA), Juniper Networks, Inc. (NYSE:JNPR), and Cenovus Energy Inc (NYSE:CVE). All of these stocks' market caps are closest to H's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ACM,37,774116,-2 BERY,34,1289609,-9 NLSN,34,1627449,4 KOD,20,2452174,0 VOYA,44,1189699,-5 JNPR,31,414029,1 CVE,23,238423,5 Average,31.9,1140786,-0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.9 hedge funds with bullish positions and the average amount invested in these stocks was $1141 million. That figure was $757 million in H's case. Voya Financial Inc (NYSE:VOYA) is the most popular stock in this table. On the other hand Kodiak Sciences Inc (NASDAQ:KOD) is the least popular one with only 20 bullish hedge fund positions. Hyatt Hotels Corporation (NYSE:H) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for H is 41.9. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and surpassed the market again by 0.9 percentage points. Unfortunately H wasn't nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); H investors were disappointed as the stock returned 10.9% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
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As an enthusiast with extensive knowledge of financial markets and investment strategies, it's evident that the article you've provided focuses on analyzing the sentiment and positions of hedge funds and billionaire investors regarding Hyatt Hotels Corporation (NYSE:H). My expertise in finance allows me to break down the key concepts and information presented in the article:
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Overview of Hyatt Hotels Corporation (H):
- The article begins by emphasizing the importance of analyzing what insiders, hedge funds, and billionaire investors think of a stock before conducting extensive research.
- It mentions that H was in the portfolios of 27 hedge funds at the end of December, with the highest historical statistic being 38 hedge funds holding the stock.
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Hedge Fund Trends:
- The article touches on the changing enthusiasm from smart money (hedge funds) towards H, noting an increase in the number of hedge funds holding the stock compared to the previous quarter.
- It provides a comparison of H's popularity among hedge funds, stating that it isn't among the 30 most popular stocks, but highlighting recent positive trends.
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Hedge Fund Performance:
- The article addresses the overall reputation of hedge funds, acknowledging a decline in their performance over the last decade compared to market indices.
- Despite the overall challenges faced by hedge funds, the article points out that certain hedge funds have outperformed the market, suggesting there are still opportunities to identify successful investments.
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Key Hedge Fund Players in H:
- The article identifies specific hedge funds with significant stakes in Hyatt Hotels Corporation, such as Southeastern Asset Management, Melvin Capital Management, Citadel Investment Group, HG Vora Capital Management, and Balyasny Asset Management.
- It highlights the portfolio weights allocated by some of these hedge funds to H, providing insights into the significance of the stock in their overall portfolios.
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Individual Hedge Fund Strategies:
- The article delves into the strategies of individual hedge funds, mentioning Parag Vora of HG Vora Capital Management and Dmitry Balyasny's Balyasny Asset Management as major players in establishing large positions in H during the quarter.
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Comparison with Other Stocks:
- A comparative analysis is presented, comparing hedge fund activity in H with other stocks such as AECOM, Berry Global Group Inc, Nielsen Holdings plc, Kodiak Sciences Inc, Voya Financial Inc, Juniper Networks, Inc., and Cenovus Energy Inc.
- The table provides a snapshot of the number of hedge funds with positions, total value of hedge fund positions, and changes in hedge fund positions for each stock.
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Sentiment Analysis:
- The article concludes with a sentiment analysis, stating that H's overall hedge fund sentiment score is 41.9, which is considered slightly negative.
- It highlights the importance of stocks with higher hedge fund positions relative to other stocks and their historical range, suggesting a preference for stocks that hedge funds are piling on.
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Performance Comparison and Recommendations:
- The article briefly compares the performance of the top 30 most popular stocks among hedge funds with H's performance, indicating that H underperformed the market in the specified time frame.
- It suggests that for those interested in investing in large-cap stocks with significant upside potential, exploring the top 30 most popular stocks among hedge funds might be beneficial.
In summary, the article provides a comprehensive analysis of hedge fund sentiment, key players in H, comparative analysis with other stocks, and a sentiment score, offering valuable insights for investors interested in Hyatt Hotels Corporation.
