Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA)? The smart money sentiment can provide an answer to this question.
Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) has experienced an increase in hedge fund sentiment lately. Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) was in 22 hedge funds’ portfolios at the end of June. The all time high for this statistic is 34. Our calculations also showed that LTRPA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the 21st century investor’s toolkit there are a lot of methods stock traders have at their disposal to assess their stock investments. Two of the most underrated methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the broader indices by a solid amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Israel Englander of Millennium Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s analyze the fresh hedge fund action regarding Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA).
Do Hedge Funds Think LTRPA Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in LTRPA 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.
Among these funds, Ancient Art (Teton Capital) held the most valuable stake in Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA), which was worth $20.9 million at the end of the second quarter. On the second spot was HG Vora Capital Management which amassed $12.2 million worth of shares. Isomer Partners, Millennium Management, and Fairfax Financial Holdings were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Isomer Partners allocated the biggest weight to Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA), around 2.78% of its 13F portfolio. Ancient Art (Teton Capital) is also relatively very bullish on the stock, earmarking 1.96 percent of its 13F equity portfolio to LTRPA.
Consequently, key money managers have been driving this bullishness. ExodusPoint Capital, managed by Michael Gelband, established the largest position in Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA). ExodusPoint Capital had $0.5 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $0.2 million position during the quarter.
Let’s now review hedge fund activity in other stocks similar to Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA). These stocks are Peoples Financial Services Corp. (NASDAQ:PFIS), First Internet Bancorp (NASDAQ:INBK), Xunlei Ltd (NASDAQ:XNET), BRT Apartments Corp (NYSE:BRT), Drive Shack Inc. (NYSE:DS), Tiptree Inc. (NASDAQ:TIPT), and NewAge Inc (NASDAQ:NBEV). This group of stocks’ market valuations are closest to LTRPA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PFIS | 1 | 1563 | -2 |
| INBK | 11 | 14963 | 1 |
| XNET | 8 | 5931 | 1 |
| BRT | 7 | 14726 | 4 |
| DS | 12 | 22148 | -4 |
| TIPT | 9 | 8919 | 5 |
| NBEV | 7 | 10685 | 0 |
| Average | 7.9 | 11276 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.9 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $93 million in LTRPA’s case. Drive Shack Inc. (NYSE:DS) is the most popular stock in this table. On the other hand Peoples Financial Services Corp. (NASDAQ:PFIS) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) is more popular among hedge funds. Our overall hedge fund sentiment score for LTRPA is 75.4. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately LTRPA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LTRPA were disappointed as the stock returned -20.6% since the end of the second quarter (through 10/22) 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 most of these stocks already outperformed the market since 2019.
Follow Liberty Tripadvisor Holdings Inc. (NASDAQ:LTRPA)
Follow Liberty Tripadvisor Holdings Inc. (NASDAQ:LTRPA)
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Disclosure: None. This article was originally published at Insider Monkey.
