After several tireless days we have finished crunching the numbers from the nearly 800 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of December 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Priceline.com Inc (NASDAQ:PCLN).
Priceline.com Inc (NASDAQ:PCLN) has seen a decrease in enthusiasm from smart money lately. PCLN was in 85 hedge funds’ portfolios at the end of December. There were 86 hedge funds in our database with PCLN holdings at the end of the previous quarter. At the end of this article we will also compare PCLN to other stocks including Morgan Stanley (NYSE:MS), BHP Billiton plc (ADR) (NYSE:BBL), and Simon Property Group, Inc (NYSE:SPG) to get a better sense of its popularity.
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Priceline.com’s stock has inched up by 3.80% over the last 52 weeks and is currently trading at around 16 times earnings, which is in line with the average for the S&P 500. The company is set to benefit from lower oil prices as cheaper fuel is likely to increase the demand for travel. For the fourth quarter, Priceline posted a 12% annual growth in profit to $504.3 million, while its revenue of $2.0 billion went up by 8.7% on the year and topped the estimates of $1.96 billion. For the current quarter, the company anticipates its revenue to grow between 9% and 16%.
When it comes to the smart money sentiment, aside from the overall data we can observe by analyzing 13F filings, we can also mention some opinions voiced by investors bullish on the stock. Among others, billionaire Stephen Mandel’s Lone Pine Capital, which owns 834,421 shares, mentioned the company in its third-quarter investor letter. More specifically, the fund said that Priceline.com is among several Internet disruptors that it holds, adding that “Internet disrupters are capturing a significant portion of the economics in a number of vertical markets (advertising, video gaming, media, retailing, travel), building significant moats around their businesses and putting tremendous pressure on the business models of incumbents.”
On the other hand, billionaire Leon Cooperman’s Omega Advisors closed its stake in Priceline during the last three months of 2015, despite the fact that the fund had projected the company’s stock to grow substantially in the medium run. In its third-quarter investor conference call, Omega disclosed holding 1.9% of its assets in Priceline (it reported 115,025 shares in its 13F for the third quarter) and added that it expected the stock to grow by 18% per year for the next three to five years.
With all of this in mind, we’re going to check out the new action regarding Priceline.com Inc (NASDAQ:PCLN).
What have hedge funds been doing with Priceline.com Inc (NASDAQ:PCLN)?
At Q4’s end, a total of 85 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 1% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Lone Pine Capital holds the most valuable position in Priceline.com Inc (NASDAQ:PCLN). Lone Pine Capital has a $1.0638 billion position in the stock, comprising 4.5% of its 13F portfolio. On Lone Pine Capital’s heels is Tiger Global Management LLC, led by Chase Coleman, holding a $966.9 million position; the fund has 7.8% of its 13F portfolio invested in the stock. Some other peers with similar optimism consist of Ken Griffin’s Citadel Investment Group, Andreas Halvorsen’s Viking Global and D. E. Shaw’s D E Shaw.
Seeing as Priceline.com Inc (NASDAQ:PCLN) has experienced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of money managers that elected to cut their positions entirely in the third quarter. It’s worth mentioning that Leon Cooperman’s Omega Advisors sold off the largest stake of all the hedgies followed by Insider Monkey, comprising about $142.3 million in stock, and Alok Agrawal’s Bloom Tree Partners was right behind this move, as the fund cut about $59.5 million worth of shares. These transactions are interesting, as aggregate hedge fund interest fell by 1 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Priceline.com Inc (NASDAQ:PCLN) but similarly valued. These stocks are Morgan Stanley (NYSE:MS), BHP Billiton plc (ADR) (NYSE:BBL), Simon Property Group, Inc (NYSE:SPG), and Colgate-Palmolive Company (NYSE:CL). This group of stocks’ market valuations match PCLN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MS | 50 | 2444952 | -7 |
| BBL | 14 | 168955 | 10 |
| SPG | 31 | 1128085 | 1 |
| CL | 32 | 1776079 | 1 |
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1.38 billion. That figure was $7.23 billion in PCLN’s case. Morgan Stanley (NYSE:MS) is the most popular stock in this table with a total of 50 funds holding long positions. On the other hand BHP Billiton plc (ADR) (NYSE:BBL) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Priceline.com Inc (NASDAQ:PCLN) 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.
