The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Trip.com Group Limited (NASDAQ:TCOM) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Trip.com Group Limited (NASDAQ:TCOM) was in 36 hedge funds’ portfolios at the end of September. The all time high for this statistic is 67. TCOM investors should be aware of a decrease in support from the world’s most elite money managers of late. There were 41 hedge funds in our database with TCOM positions at the end of the second quarter. Our calculations also showed that TCOM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Richard S. Pzena of Pzena Investment Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s check out the recent hedge fund action regarding Trip.com Group Limited (NASDAQ:TCOM).
Do Hedge Funds Think TCOM Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in TCOM over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Trip.com Group Limited (NASDAQ:TCOM) was held by Platinum Asset Management, which reported holding $319 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $272.8 million position. Other investors bullish on the company included Pzena Investment Management, Kontiki Capital, and Alkeon Capital Management. In terms of the portfolio weights assigned to each position Kontiki Capital allocated the biggest weight to Trip.com Group Limited (NASDAQ:TCOM), around 23.7% of its 13F portfolio. Kadensa Capital is also relatively very bullish on the stock, earmarking 11.99 percent of its 13F equity portfolio to TCOM.
Because Trip.com Group Limited (NASDAQ:TCOM) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there was a specific group of hedge funds that slashed their full holdings in the third quarter. It’s worth mentioning that Andrew Weiss’s Weiss Asset Management dropped the largest investment of all the hedgies watched by Insider Monkey, comprising close to $63.5 million in stock, and D. E. Shaw’s D E Shaw was right behind this move, as the fund dumped about $57 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 5 funds in the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Trip.com Group Limited (NASDAQ:TCOM) but similarly valued. We will take a look at Insulet Corporation (NASDAQ:PODD), AMC Entertainment Holdings Inc (NYSE:AMC), DraftKings Inc. (NASDAQ:DKNG), FirstEnergy Corp. (NYSE:FE), Broadridge Financial Solutions, Inc. (NYSE:BR), SK Telecom Co., Ltd. (NYSE:SKM), and Halliburton Company (NYSE:HAL). This group of stocks’ market values are similar to TCOM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PODD | 32 | 1318310 | -6 |
| AMC | 17 | 252354 | -4 |
| DKNG | 28 | 1326732 | 2 |
| FE | 38 | 1479736 | 2 |
| BR | 17 | 229119 | -10 |
| SKM | 6 | 108281 | -2 |
| HAL | 29 | 1247608 | 0 |
| Average | 23.9 | 851734 | -2.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $852 million. That figure was $1794 million in TCOM’s case. FirstEnergy Corp. (NYSE:FE) is the most popular stock in this table. On the other hand SK Telecom Co., Ltd. (NYSE:SKM) is the least popular one with only 6 bullish hedge fund positions. Trip.com Group Limited (NASDAQ:TCOM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TCOM is 63. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, TCOM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TCOM were disappointed as the stock returned -13.5% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
