Before we spend many hours researching a company, we’d like to analyze what insiders, hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Avis Budget Group Inc. (NASDAQ:CAR).
Avis Budget Group Inc. (NASDAQ:CAR) was in 29 hedge funds’ portfolios at the end of September. CAR investors should pay attention to an increase in hedge fund interest lately. There were 27 hedge funds in our database with CAR positions at the end of the previous quarter. Our calculations also showed that CAR isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the fresh hedge fund action encompassing Avis Budget Group Inc. (NASDAQ:CAR).
How are hedge funds trading Avis Budget Group Inc. (NASDAQ:CAR)?
At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in CAR at the beginning of this year. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Karthik Sarma’s SRS Investment Management has the largest position in Avis Budget Group Inc. (NASDAQ:CAR), worth close to $385.7 million, amounting to 8% of its total 13F portfolio. Coming in second is Larry Robbins of Glenview Capital, with a $139.4 million position; 0.9% of its 13F portfolio is allocated to the company. Other peers that hold long positions comprise Richard S. Pzena’s Pzena Investment Management, Ric Dillon’s Diamond Hill Capital and Steven Boyd’s Armistice Capital.
As one would reasonably expect, specific money managers were breaking ground themselves. Armistice Capital, managed by Steven Boyd, assembled the largest position in Avis Budget Group Inc. (NASDAQ:CAR). Armistice Capital had $32.1 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also initiated a $5.2 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Phill Gross and Robert Atchinson’s Adage Capital Management, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
Let’s go over hedge fund activity in other stocks similar to Avis Budget Group Inc. (NASDAQ:CAR). These stocks are Dorman Products Inc. (NASDAQ:DORM), Five9 Inc (NASDAQ:FIVN), Liberty Oilfield Services Inc. (NYSE:LBRT), and Quidel Corporation (NASDAQ:QDEL). All of these stocks’ market caps match CAR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DORM | 11 | 72254 | 1 |
| FIVN | 25 | 463899 | -1 |
| LBRT | 8 | 127003 | 1 |
| QDEL | 15 | 132346 | -2 |
| Average | 14.75 | 198876 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $198.88 billion. That figure was $810 million in CAR’s case. Five9 Inc (NASDAQ:FIVN) is the most popular stock in this table. On the other hand Liberty Oilfield Services Inc. (NYSE:LBRT) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Avis Budget Group Inc. (NASDAQ:CAR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
