The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at 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. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Hilton Worldwide Holdings Inc (NYSE:HLT) and determine whether the smart money was really smart about this stock.
Hilton Worldwide Holdings Inc (NYSE:HLT) investors should be aware of a decrease in hedge fund sentiment in recent months. Hilton Worldwide Holdings Inc (NYSE:HLT) was in 44 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 60. Our calculations also showed that HLT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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. Keeping this in mind let’s go over the new hedge fund action regarding Hilton Worldwide Holdings Inc (NYSE:HLT).
Michael Gelband of ExodusPoint Capital
Do Hedge Funds Think HLT Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 44 of the hedge funds tracked by Insider Monkey were long this stock, a change of -2% from one quarter earlier. By comparison, 57 hedge funds held shares or bullish call options in HLT a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Bill Ackman’s Pershing Square has the number one position in Hilton Worldwide Holdings Inc (NYSE:HLT), worth close to $1.7023 billion, comprising 18% of its total 13F portfolio. Coming in second is Boykin Curry of Eagle Capital Management, with a $1.0008 billion position; 2.9% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism comprise Gabriel Plotkin’s Melvin Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Gabriel Plotkin’s Melvin Capital Management. In terms of the portfolio weights assigned to each position Pershing Square allocated the biggest weight to Hilton Worldwide Holdings Inc (NYSE:HLT), around 17.99% of its 13F portfolio. Tiger Eye Capital is also relatively very bullish on the stock, earmarking 9.29 percent of its 13F equity portfolio to HLT.
Due to the fact that Hilton Worldwide Holdings Inc (NYSE:HLT) has experienced declining sentiment from the aggregate hedge fund industry, we can see that there was a specific group of hedgies that decided to sell off their positions entirely heading into Q4. At the top of the heap, Gaurav Kapadia’s XN Exponent Advisors dumped the biggest position of all the hedgies watched by Insider Monkey, valued at close to $66.9 million in stock. John Khoury’s fund, Long Pond Capital, also dumped its stock, about $51.9 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 1 funds heading into Q4.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Hilton Worldwide Holdings Inc (NYSE:HLT) but similarly valued. We will take a look at Discover Financial Services (NYSE:DFS), Okta, Inc. (NASDAQ:OKTA), Zscaler, Inc. (NASDAQ:ZS), Centene Corporation (NYSE:CNC), CRH PLC (NYSE:CRH), General Mills, Inc. (NYSE:GIS), and SBA Communications Corporation (NASDAQ:SBAC). All of these stocks’ market caps are closest to HLT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DFS | 37 | 516149 | 0 |
| OKTA | 62 | 2262165 | 5 |
| ZS | 38 | 1624343 | 0 |
| CNC | 50 | 2431144 | 1 |
| CRH | 7 | 83127 | -2 |
| GIS | 32 | 731647 | -5 |
| SBAC | 36 | 1893871 | -7 |
| Average | 37.4 | 1363207 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37.4 hedge funds with bullish positions and the average amount invested in these stocks was $1363 million. That figure was $5364 million in HLT’s case. Okta, Inc. (NASDAQ:OKTA) is the most popular stock in this table. On the other hand CRH PLC (NYSE:CRH) is the least popular one with only 7 bullish hedge fund positions. Hilton Worldwide Holdings Inc (NYSE:HLT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HLT is 59.6. 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. 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 still beat the market by 3.6 percentage points. Hedge funds were also right about betting on HLT as the stock returned 9.8% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Hilton Worldwide Holdings Inc. (NYSE:HLT)
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Disclosure: None. This article was originally published at Insider Monkey.
