4) Hilton Worldwide Holdings Inc. (NYSE:HLT)
Number of Hedge Fund Holders: 61
Hilton Worldwide Holdings Inc. (NYSE:HLT) is the global hospitality company, which focuses on managing, franchising, owning and leasing hotels and resorts. The company licenses its intellectual property, which includes brand names, trademarks and service marks.
The company is expected to benefit from various digital initiatives, efforts focusing on unit expansion and strategic partnerships and acquisitions. Apart from this, emphasis on luxury and lifestyle properties should bode well. Hilton Worldwide Holdings Inc. (NYSE:HLT) leverages technology to offer personalized experiences for guests. It made significant strides in its development plans, as it opened over 100 hotels. As a result, the total now comes out to be ~17,000 rooms in 1Q 2024.
Hilton Worldwide Holdings Inc. (NYSE:HLT) expects system-wide RevPAR growth in the range of 2% – 4% for remainder of 2024. This is expected to be supported by strong performance in international markets.
Insider Monkey saw that 61 hedge funds out of the 920 hedge funds held stakes in Hilton Worldwide Holdings Inc. (NYSE:HLT) as of the end of 1Q 2024. Strategic brand expansions, healthy development pipeline and innovative technology integration are expected to act as growth enablers.
That being said, the company’s valuation can be a concern for some investors. It trades at premium with a NTM P/E ratio of ~27.86x as against the sectoral average of ~21.7x. These numbers indicate somewhat stretched valuations. However, it expects to return ~$3 billion to shareholders in the form of buybacks and dividends. This enhances the confidence of investors in its financial health.
Baron Funds, an investment management company, released its first quarter 2024 investor letter. In this, it mentioned about Hilton Worldwide Holdings Inc. (NYSE:HLT). Here is what the fund said:
“We recently acquired additional shares of Hilton Worldwide Holdings Inc. (NYSE:HLT). Hilton is the second largest hotel company in the world with 7,500 properties, 1.2 million rooms, 22 unique brands, and 180 million loyalty members in its database. Hilton has a superior executive team led by long-time CEO Chris Nassetta (over 16 years as CEO).
In March, we attended Hilton’s Investor Day in Washington, D.C. and also spent time with Chris in advance. Our main takeaway from the Investor Day presentations, besides being able to meet with a deeper and impressive layer of the management organization, is that Hilton’s growth prospects over the next five years are superior to the prior five due to: i) accelerating unit growth driven by new and existing brands; ii) several brand ‘seedlings’ planted with significant white space for growth (e.g., Graduate Hotels, SLH, LivSmart); and iii) Hilton’s better ability to capture the brand ‘conversion’ opportunity irrespective of new hotel construction/development…” (Click here to read the full text)
