The Russell 2000 ETF (IWM) has shot up by 38% since hitting a 52-week low on February 11, easily outdistancing the S&P 500 ETF (SPY)’s 19% gains during that time. Nor is the small-cap rally likely to be over. History shows that after periods of 15% or greater declines in the Russell 2000 ETF, it has responded with average gains of nearly 100%. In fact, only once did the rebound run come in below 60% gains. It’s no wonder then that hedge funds appear to be aggressively putting their money back into small-cap stocks. In this article, we’ll look at their Q3 trading habits in regards to Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP).
Is Ctrip a good investment now? The smart money is betting on the stock. The number of long hedge fund positions rose by 7 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Equifax Inc. (NYSE:EFX), Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA), and Genuine Parts Company (NYSE:GPC) to gather more data points.
Follow Trip.com Group Limited (NASDAQ:TCOM)
Follow Trip.com Group Limited (NASDAQ:TCOM)
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How are hedge funds trading Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)?
At the end of the third quarter, a total of 50 of the hedge funds tracked by Insider Monkey were long this stock, a 16% jump from the second quarter of 2016. That followed a steep decline in Q2, as many Chinese stocks lost hedge fund support over fears surrounding the country’s economic growth and stability. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Fisher Asset Management, managed by Ken Fisher, holds the largest position in Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP). Fisher Asset Management has a $460 million position in the stock. The second largest stake is held by Discovery Capital Management, led by Rob Citrone, holding a $229.3 million position. Other members of the smart money that are bullish comprise Jason Karp’s Tourbillon Capital Partners, Lei Zhang’s Hillhouse Capital Management, and Daniel S. Och’s OZ Management.
As one would reasonably expect, some big names were leading the bulls’ herd. Silver Lake Partners, managed by Jim Davidson, Dave Roux, and Glenn Hutchins, initiated the largest position in Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP). Silver Lake Partners had $157.5 million invested in the holding at the end of the quarter. Ricky Sandler’s Eminence Capital also initiated an $85.6 million position during the quarter. The following funds were also among the new CTRP investors: Philippe Jabre’s Jabre Capital Partners, Ken Griffin’s Citadel Investment Group, and Noam Gottesman’s GLG Partners.
Let’s also examine hedge fund activity in other stocks similar to Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP). We will take a look at Equifax Inc. (NYSE:EFX), Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA), Genuine Parts Company (NYSE:GPC), and Northern Trust Corporation (NASDAQ:NTRS). This group of stocks’ market valuations resemble CTRP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EFX | 34 | 528510 | 8 |
| ULTA | 40 | 2044715 | 4 |
| GPC | 23 | 347677 | 1 |
| NTRS | 30 | 486076 | 3 |
As you can see these stocks had an average of 31.75 hedge funds with bullish positions and the average amount invested in these stocks was $852 million. That figure was $2.41 billion in CTRP’s case. Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) is the most popular stock in this table. On the other hand Genuine Parts Company (NYSE:GPC) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) is more popular among hedge funds and has the most money invested in it. Considering that hedge funds are fond of this stock in relation to its market cap peers, and growing more confident, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
