In this article, we will take a look at the 5 most undervalued hotel stocks to buy according to hedge funds. To see more such companies, go directly to 12 Most Undervalued Hotel Stocks To Buy According To Hedge Funds.
5. Host Hotels & Resorts, Inc. (NYSE:HST)
Number of Hedge Fund Holders: 25
Host Hotels & Resorts, Inc. (NYSE:HST) is yet another hotel-focused REIT in our list of the most undervalued hotel stocks to buy according to hedge funds.
Recently, Host Hotels & Resorts, Inc. (NYSE:HST) posted strong Q4 results. FFO in the quarter came in at $0.44, beating estimates by $0.02. Revenue in the period jumped about 26.3% on a YoY basis to reach $1.26 billion, beating estimates by $10 million.
Out of the 943 hedge funds tracked by Insider Monkey, 25 hedge funds reported owning stakes in Host Hotels & Resorts, Inc. (NYSE:HST). The total value of these stakes was $411 million. The biggest hedge fund stakeholder of Host Hotels & Resorts, Inc. (NYSE:HST) during this period was Noam Gottesman’s GLG Partners which owns a $161 million stake in the firm.
4. Hyatt Hotels Corporation (NYSE:H)
Number of Hedge Fund Holders: 27
Hotels and vacation properties giant Hyatt Hotels Corporation (NYSE:H) ranks 4th in our list of the most undervalued hotel stocks to buy according to hedge funds. Earlier this month, Hyatt Hotels Corporation (NYSE:H) posted Q4 results. Adjusted EPS in the quarter came in at $2.55, beating estimates by $2.22. Adjusted EBITDA in the quarter totaled $232 million. Comparable system-wide RevPAR increased 34.8% in the fourth quarter and 60.2% for the full year of 2022 from the comparable period of 2021.
As of the end of the fourth quarter of 2022, 27 hedge funds tracked by Insider Monkey had stakes in Hyatt Hotels Corporation (NYSE:H).
Baron Funds made the following comment about Hyatt Hotels Corporation (NYSE:H) in its Q3 2022 investor letter:
“Shares of global hotelier Hyatt Hotels Corporation (NYSE:H) increased in the quarter on strong revenue-per-available-room results as business travel continued to recover from pandemic lows. While leisure rates dropped a little in the seasonally slower back-to-school period, this decline was expected and was more than offset by increases in business transient and group bookings. Robust rates across the industry are leading to higher margins, including for Hyatt. Hyatt is using the increased cash flow to buy-in its shares, indicating that it sees value in the stock.”
3. Park Hotels & Resorts Inc. (NYSE:PK)
Number of Hedge Fund Holders: 29
Park Hotels & Resorts Inc. (NYSE:PK) has been gaining attention in 2023. Park Hotels & Resorts Inc. (NYSE:PK) is up about 21% year to date through February 26.
Earlier this month Park Hotels & Resorts Inc. (NYSE:PK) posted upbeat Q4 results.
FFO in the quarter came in at $0.40, in-line with estimates. Revenue in the quarter jumped about 48% on a YoY basis to reach $665 million, beating estimates by $12.68 million. For the first quarter of 2023, Park Hotels & Resorts Inc. (NYSE:PK) expects adjusted FFO to come in between $0.30 to $0.37.
For full-year 2023, Park Hotels & Resorts Inc. (NYSE:PK) expects adjusted FFO in the range of $1.60 to $1.99.
As of the end of the fourth quarter of 2022, 29 hedge funds reported having stakes in Park Hotels & Resorts Inc. (NYSE:PK). The total value of these stakes was about $226 million. The biggest stakeholder of Park Hotels & Resorts Inc. (NYSE:PK) was Ken Griffin’s Citadel Investment Group which owns a $69 million stake in the company.
Vulcan Value Partners made the following comment about Park Hotels & Resorts Inc. (NYSE:PK) in its Q3 2022 investor letter:
“We also purchased Park Hotels & Resorts Inc. (NYSE:PK) during the quarter. Park Hotels and Resorts is a real estate investment trust (REIT) that owns a number of Hilton’s flagship properties including the Hilton Hawaiian Village and the New York Hilton. In 2017 Hilton completed the spinoff of Park Hotels and Resorts, leaving Hilton primarily as a pure franchise and management company. Despite the possibility of short-term fluctuations in global travel from economic or geopolitical concerns, we believe that Park is trading at a significant discount to our estimate of intrinsic value and an even larger discount to replacement value.”
2. Wyndham Hotels & Resorts, Inc. (NYSE:WH)
Number of Hedge Fund Holders: 34
Hotels giant Wyndham Hotels & Resorts, Inc. (NYSE:WH) recently posted strong Q4 results. Adjusted EPS in the quarter totaled $0.72, beating estimates by $0.10. Revenue in the period fell about 15% on a YoY basis to $334 million, beating estimates by $9.6 million.
34 hedge funds in Insider Monkey database of 943 hedge funds had stakes in Wyndham Hotels & Resorts, Inc. (NYSE:WH) as of the end of the fourth quarter of 2022. The net worth of these stakes was $763 million. The biggest hedge fund stakeholder of Wyndham Hotels & Resorts, Inc. (NYSE:WH) during this period was Ken Griffin’s Citadel Investment Group which owns a stake worth over $170 million.
1. Marriott International, Inc. (NYSE:MAR)
Number of Hedge Fund Holders: 47
Marriott International, Inc. (NYSE:MAR) is perhaps the most famous name in our list of the most undervalued hotel stocks to buy according to hedge funds. Out of the 943 hedge funds tracked by Insider Monkey, 47 hedge funds reported owning stakes Marriott International, Inc. (NYSE:MAR). The biggest hedge fund stakeholders of the hotel at the end of 2022 included Boykin Curry’s Eagle Capital Management ($696 million stake) and Robert Rodriguez And Steven Romick’s First Pacific Advisors LLC ($116.4 million stake).
Marriott International, Inc. (NYSE:MAR) shares have gained about 15% year to date through February 26. Marriott International, Inc. (NYSE:MAR) recently posted strong Q4 results. Adjusted EPS in the fourth quarter came in at $1.96, beating estimates by $0.14. Revenue in the period jumped about 33% on a YoY basis to reach $5.92 billion, beating estimates by $540 million.
LRT Capital made the following comment about Marriott International, Inc. (NASDAQ:MAR) in its October investor letter:
“Marriott International, Inc. (NASDAQ:MAR) is the world’s largest hotel company followed closely by Hilton (HLT) and Intercontinental Hotels Group plc (IHG). The company owns a portfolio of brands from the low end (Courtyard, SpringHill Suites, Aloft), through the mid-tier (Marriott, Sheraton, Westin, Renaissance Hotels), to the luxury high end (JW Marriot, Ritz-Carlton, St. Regis). In total the company had 7,642 properties with over 1.4 million rooms as of the end of Q1 2021.
The majority (85%) of Marriott’s revenue comes from hotels in the United States, with the rest almost evenly split between Asia Pacific and Europe. Like it’s smaller peer, Hilton, the company today is almost exclusively a manager and franchisor of hotels, not a hotel owner. The company owns 66 hotels, manages 2,083 and franchises 5,493. Like all franchise-based businesses Marriott requires very little capital to grow as it utilizes the investment capital of its hotel-owners/partners to expand. Marriott currently faces a difficult operating environment due to the Covid-19 pandemic and uncertainty about the future of business travel. However, the company is an excellent operator with a somewhat leveraged capital structure (the company acquired Starwood Properties in late 2016) – if pent-up demand for travel materializes post-Covid, as we expect it will, the company will quickly go from losing money to raking in profits.”
You can also take a peek at 19 Biggest Outdoor Brands and Companies and 10 Most Undervalued Solar Stocks to Buy.
